Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — TRADE AND INDUSTRY

Two-stroke Engines

Mr. Robert Ainsworth: To ask the President of the Board of Trade what action his Department is taking to ensure that the United Kingdom benefits from new two-stroke and orbital two-stroke engine technology.

The Minister for Industry (Mr. Tim Sainsbury): The Government believe that two-stroke technology could deliver significant commercial and environmental benefits. It is one of a number of alternative vehicle technologies which are being studied by the Department of Transport.

Mr. Ainsworth: Does the Minister agree that the once-ailing French motor industry has dragged itself forward by taking a technological lead in diesel development and that it is important that we do not allow ourselves to fall behind again? The French industry advanced through the Government working actively with industry to ensure that development. Will the Department have the necessary input into this new and exciting sphere of technology to ensure that this time round British industry takes advantage of it when it comes on stream in a few years' time?

Mr. Sainsbury: I hope that the hon. Gentleman will recognise that the British vehicle industry is extremely competitive. Of course, like every other industry, it could improve, but it is definitely competitive with the French. I hope that he is also aware of the work done by the United Kingdom Engine Emissions Consortium, which has been substantially supported by my Department. Valuable work is also being done through a review by the Transport Research Laboratory, all of which will contribute to the industry. The vehicle industry spends substantial sums on research and development and it is the best judge of where R and D expenditure should be directed to the best commercial advantage.

Mr. Adley: Does my right hon. Friend agree that if we take advantage of the developments in orbital two-stroke engine technology we need to be able to do so within the stable framework of the European Community? I recognise that there may be short-term disadvantages for other countries with our social chapter opt-out, but does my right hon. Friend agree that, in the long term, our membership of the Community and our ratification of the

Maastricht treaty is essential for that technology, its exploitation and all the other industrial and commercial aspects of British life?

Mr. Sainsbury: I very much agree with my hon. Friend and find that there is near-universal agreement among business leaders in all sectors of the industry and all sizes of business that our continued membership of, and role in, the Community is vital for our prosperity—certainly for our vehicle industry.

Mr. Beggs: Will the President of the Board of Trade undertake to ensure that his Department and British industry are fully aware of the outstanding achievements in two-stroke technology of Professor Gordon Blair and his team at Queen's university? Will the President of the Board of Trade seek to ensure that the benefits of that research and development create jobs in the United Kingdom and do not, as has happened in the past, export jobs elsewhere?

Mr. Sainsbury: I am happy to take this opportunity to pay tribute to the work of Professor Gordon Blair and Queen's university, Belfast, where there is well-recognised expertise in such technology. I think that I am correct in saying that my hon. Friend the Minister for Trade, in a previous role, was able to support the valuable work done by the team.

European Regional Development Fund

Mr. Knox: To ask the President of the Board of Trade what is the total value of grants allocated to England from the European regional development fund since its inception.

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine): The total value of ERDF grants allocated to England since 1975 is approximately £3,900 million at 1993 prices.

Mr. Knox: Does my right hon. Friend agree that those grants make an important contribution to strengthening the British economy? Is he satisfied that the public are aware of the scale of those grants?

Mr. Heseltine: I agree with my hon. Friend that those grants provide important help to many parts of the country. I hope that the public are aware of them. The Government consistently represent Britain's case in achieving the maximum amount of grants to help the areas that need them.

Mr. Jim Cunningham: What proportion of those grants is used to assist British industry with the development of technology? Many of our competitors receive Government assistance and various forms of grant to help them to develop their technologies and industry. I am sure that the Secretary of State will also bear in mind the fact that, in manufacturing, development costs represent a high proportion of overall costs.

Mr. Heseltine: The hon. Gentleman will recognise that one has to be extremely careful about following the logic of that suggestion, because other countries may be using the grants to subsidise or support their companies. That would put our companies at a significant disadvantage.

Mr. Mans: What action has my right hon. Friend's Department taken in relation to the ERDF or any other


funds that might be available from Europe or from the British Government to help the survival of Leyland DAF in Lancashire?

Mr. Heseltine: My hon. Friend will realise that these grants apply to specific regions. We make representations to ensure that Britain maximises its entitlement. The case of Leyland DAF is still under close attention by my Department. We are watching and assisting—wherever appropriate—the actions of the receiver.

Intervention Fund for Shipbuilding

Mr. Byers: To ask the President of the Board of Trade what further discussions he plans to hold within the EC on the intervention fund for shipbuilding; and if he will make a statement.

Mr. Heseltine: None at present, but I am keeping the situation under review.

Mr. Byers: Will the President of the Board of Trade explain how the United Kingdom Government can agree to a 36 per cent. subsidy from the intervention fund for shipyards in Germany and yet deny access to the intervention fund for shipyards in this country? Does he agree that warship builders should have access to the intervention fund to help them to diversify into the merchant sector? Is not it about time that the Government put the British shipbuilding industry first and took positive action so that we can win new orders and keep jobs in our communities?

Mr. Heseltine: The hon. Gentleman will be aware that those arrangements were entered into as part of a reduction in capacity and it was decided in 1985 that the grants would not apply to warship manufacturers on privatisation. Their cost structures, with very high overheads because of the highly sophisticated products that they make, would not make them easily capable of competing in the merchant ship sector. In any case, there is already significant overcapacity in that form of construction.

Mrs. Browning: In putting the interests of British shipbuilding first, will my right hon. Friend not make the mistake that the Labour Government made—of subsidising shipbuilding to the extent that ships were sold off cheap to Poland, thus flooding the marketplace? We were then unable to be competitive.

Mr. Heseltine: My hon. Friend makes a most important point. I am also aware that once the Labour party had nationalised the warship builders, we secured no further export orders.

Mr. Cousins: Is the President of the Board of Trade telling us that in no circumstances would he contemplate stepping forward to protect the interests of the 50,000 workers in naval shipbuilding at Lowestoft, Southampton, Belfast, on the Clyde and the Tyne, and at Barrow, or to obtain access to intervention or any other sort of funding permitted by the European Community?

Mr. Heseltine: The hon. Gentleman obviously did not hear my reply—that I am keeping the matter under review. I do not believe, however, that access to the intervention fund would solve the acute problems of low demand that these companies face.

Standing Charges (Pensioners)

Mr. Chisholm: To ask the President of the Board of Trade what proposals he has in relation to the paying of gas, electricity and telephone standing charges by pensioners.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton): Government legislation has provided the regulators with full powers to regulate utility prices for supply to household customers and a duty to protect the interests of consumers. Utilities may decide on the form and scale of their charges, including standing charges, but must satisfy their regulator.

Mr. Chisholm: Is the Minister aware that a large number of pensioners have difficulty with their electricity, gas and telephone bills, and that standing charges often represent 50 per cent. or more of those bills? Does he realise that the profits of the privatised utilities have exceeded £35 billion during this unending recession? Will the Government therefore follow the example of the Irish and other European Governments by ensuring that a small part of those fat profits is used to abolish pensioners' standing charges?

Mr. Hamilton: Of course, under nationalisation we were used to industries making not profits but losses, which were paid for by the community generally. If the hon. Gentleman wants to protect the interests of those on lower incomes, he has got the wrong end of the stick. Of those in the bottom one fifth of the income scale, only about 30 per cent. are pensioners. If, having phased out standing charges, we were to recoup that revenue by increasing prices, the poorest in society would be the losers.

Mr. Bill Walker: Does my hon. Friend agree that nothing is for free and that standing charges are part of the charge made for having and using any service that is available? If there were no standing charges, other charges would have to be adjusted accordingly. The question is, on whom would those adjusted charges fall and who would be most greatly disadvantaged?

Mr. Hamilton: I agree entirely with my hon. Friend. Some standing charges have diminished over the years. Since privatisation, British Gas standing charges have reduced by 32 per cent., which reflects that company's success in paying its way by being efficient. That is a great British company, as many companies that were previously nationalised have become—earning income abroad which contributes substantially to their increased profits, from which tax revenue is paid rather than consumed.

Mr. O'Neill: Does the Minister agree that the most effective way of alleviating fuel poverty is to increase the housing stock's energy efficiency and to assist the funding of such work? Is he prepared to instruct the electricity regulator to introduce an E factor similar to that employed by British Gas, whereby it is prepared to fund environmental improvements and conservation? [Interruption.] If the Minister has finished consulting his colleagues, perhaps he will give the House an answer.

Mr. Hamilton: I prefer to ask those who know about the subject—unlike the hon. Gentleman, who prefers to rely on his colleagues' ignorance—and my hon. Friend the


Minister for Energy is the Minister principally responsible for such matters. I can tell the hon. Gentleman that we have no power to instruct the regulator in such terms. The regulator's powers are set out in Acts of Parliament He is obliged to consider a variety of factors, which are all defined in legislation.

Trade Missions

Mr. Tredinnick: To ask the President of the Board of Trade how many trade missions abroad will be supported by Ministers in his Department in the foreseeable future; which countries they will visit; and if he will make a statement.

The Minister for Trade (Mr. Richard Needham): Ministerial participation is provisionally planned for at least 14 missions to 17 countries in the next year. It is likely that others will be arranged through the year.

Mr. Tredinnick: Given the spectacular success of the visit by my right hon. Friend the Prime Minister to Saudi and Oman, when he secured 20,000 jobs—many in Labour-held constituencies—does my hon. Friend agree that the highest priority should be given to Minister-backed trade missions? Will he confirm that his highest priority is to get out and back British business abroad as well as at home?

Mr. Needham: Of course, it is the highest priority of Ministers in the Department of Trade and Industry to get out and sell. It is also vital that those who go out and sell know how to do so and the markets to which they go. I would not advise Opposition Members to go on Cook's tours because when they have set out their stall, 18 million potential customers have invariably said no.

Mr. Bennett: Does the Minister agree that manufacturers of mining equipment, such as Oldham Batteries in my constituency, have regularly co-operated in trade missions, but that they want help from the Government to ensure that when they win orders they have the credits to fulfil them? They also need a home-based mining industry to support their export drives.

Mr. Needham: That is why, in the autumn statement, we increased Export Credits Guarantee Department cover by £700 million and, during last year, reduced the premium rate. That is also why we are continuing to review the cover available to support our capital goods industries, to achieve our objective of doubling sales over the next five years.

Mr. Thomason: Will my hon. Friend arrange an early visit to Japan, so that he can emphasise the importance of inward investment from that country to Britain, we can remain the principal recipient of Japanese inward investment among all the European countries and we can continue to talk up the enormous advantages of British industry—contrary to Labour, which always seeks to destroy its character?

Mr. Needham: My hon. Friend will be pleased to learn that my right hon. Friend the Member for Guildford (Mr. Howell) and I are going to Japan next month—along with two hon. Ladies from the Opposition—to achieve precisely the objective that he wants.

Mr. Robin Cook: Did the Minister note that the business men who accompanied the Prime Minister on his trade mission to India complained that the premiums charged by the British Government for export credits are still double those charged by the Governments of our competitor countries? Why does the Department's budget for next year show that it is to stop subsidising export credits and start making a profit from them? How does the Minister expect British exporters to win in the world market if they are saddled with the only Government in the world who are using export credits as a source of profit?

Mr. Needham: The hon. Gentleman knows that that is nonsense. He knows that the ECGD has paid out in almost every year of its existence to top up the interest rate to which he referred. It so happens that, because interest rates in this country have fallen below the OECD average, it is possible—indeed, probable—that the ECGD will start to recoup some of the money that it has paid out. The hon. Gentleman is talking through his hat—or would be, if he were wearing one.
As for the premium rates in India, given the losses suffered by the ECGD, we must accept the need to make a reasonable effort not to waste the taxpayer's money. If one compares British premium rates with those in Germany, one sees that one reason why we did so well in Hong Kong, in the face of German competition, was that our premium rates were lower.

South-east Kent

Mr. David Shaw: To ask the President of the Board of Trade when he next expects to visit Dover, Deal and south-east Kent to discuss opportunities for trade and industry.

Mr. Sainsbury: My right hon. Friend the President of the Board of Trade and I both visited east Kent last year. We both look forward to further opportunities to do so.

Mr. Shaw: I thank my right hon. Friends for the tremendous interest that they have shown in Dover and Deal and in the problems faced by the area. I am also grateful for the support given by the Department and the European Commission in allocating moneys to help customs clearance agents and freight forwarders.
May I remind my right hon. Friend of our application for assisted area status? It is especially important, because the decision by all political parties in the House to proceed with the channel tunnel project will lead to tremendous change in my constituency. Some short-term help, along the lines of assisted area status, will be necessary if Dover and Deal are to succeed during that process of change.

Mr. Sainsbury: I assure my hon. Friend that we shall take careful account of the points that he has made, including the one about the short-term implications of the channel tunnel. I hope that he agrees, however, that the tunnel will also bring great opportunities to the area. I am happy to confirm that my Department is currently talking to the British International Freight Association and the east Kent initiative, with the aim of co-ordinating a United Kingdom bid for funds from the customs agent regulations that the European Commission has made available.

Mr. Nicholas Brown: Having arrived in Dover, will the Minister board a ship and travel up to Tyneside? Will he tell the people there what his Department is doing to ensure the survival—

Madam Speaker: Order. Most ingenious; I rather expected that one. Let us move on to question 7.

Assisted Area Status

Mr. Sumberg: To ask the President of the Board of Trade what representations he has received in connection with the Bolton/Bury assisted area status; and if he will make a statement.

Mr. Sainsbury: My Department received a joint written submission from the metropolitan borough councils of Bolton and Bury and one from Inward, the North West Regional Development Organisation. Several letters of support were also received from local businesses. My noble Friend Baroness Denton met a deputation of council representatives, business leaders and local Members of Parliament on 27 October 1992.

Mr. Sumberg: I appreciate that many new friends are knocking on my right hon. Friend's door—from Deal and Dover, from the mining communities and from London. Will he bear it in mind, however, that withdrawing assisted area status from Bury and Bolton would send entirely the wrong signal to the business community in my constituency?

Mr. Sainsbury: As my hon. Friend knows, I cannot anticipate the outcome of the review, but I assure him that I have taken careful account of what he said.

Mr. Lewis: I welcome the conversion of the hon. Member for Bury, South (Mr. Sumberg) to the idea of intervention.
While the Minister is considering his hon. Friend's remarks, may I point out that, over the past nine years, 72,000 manufacturing jobs have been lost in the Bolton and Bury travel-to-work area and four manufacturing closures have been announced over the past seven days? Assisted area status is needed and I add my support for it.

Mr. Sainsbury: I cannot add to what I said earlier to my hon. Friend the Member for Bury, South (Mr. Sumberg). I know from our many conversations that he could not be more energetic in pursuing his constituents' interests.

Magnox Nuclear Power Stations

Mr. Whittingdale: To ask the President of the Board of Trade whether he will make a statement on the future of the Magnox nuclear power stations.

The Minister for Energy (Mr. Tim Eggar): My hon. Friend will be aware that my Department's coal review is nearing completion. The review is considering, among other issues, the impact of nuclear generation on the electricity market, including the position of the Magnox power stations.

Mr. Whittingdale: As the Magnox nuclear power stations have the lowest avoidable costs of any form of electricity generation, does my hon. Friend agree that it makes sense, economically and environmentally, to keep them in operation for as long as it is safe to do so and that

this applies in particular to Bradwell power station in my constituency, which has just passed its long-term safety review with flying colours?

Mr. Eggar: I agree that nuclear stations, including the Magnox stations, offer considerable environmental benefits and, as the recent Ernst and Young study showed, have the lowest avoidable costs. Bradwell has performed particularly well and since the completion of its inspection has been available for 97 per cent. of the time—a high record of availability indeed.

Mr. Cunliffe: As the hon. Gentleman has probably now been convinced by his political colleagues that intervention is necessary to assist the 31 pits that are in jeopardy, does he believe that a genuine transfer of about half the nuclear levy for Magnox stations would help most of the collieries to survive? In the long term, if all the £1,270 million nuclear levy were transferred, it would assist all the 31 collieries to maintain production until supplies were exhausted.

Mr. Eggar: Those issues are among a number that are being considered by the review. The hon. Gentleman's proposition makes sense only if one assumes that the liabilities that rest on Nuclear Electric are not genuine liabilities, which has not yet been established.

Mr. Page: In supporting my hon. Friend the Member for Colchester, South and Maldon (Mr. Whittingdale), may I ask whether my hon. Friend is aware that the avoidable costs of the Magnox stations are the lowest in the nuclear industry and that comparisons with other forms of energy production show that they are considerably cheaper, at 1.2p per unit? Has a calculation been made of the costs of production of CO2, by other sources of electricity and the effect on our environment?

Mr. Eggar: My hon. Friend is right about the avoidable costs of Magnox stations, which are low. Their environmental impact is one of the factors that will be considered in the review.

Dr. Kim Howells: Does the Minister recognise that many of the Magnox stations are situated in some of the most remote areas of the country and are centres of high-paid employment in those areas? If he is going to announce the closure of Magnox reactors, will he ensure that he does not do so with the same ineptitude and thoughtlessness as he announced the pit closures?

Mr. Eggar: I am not sure whether the hon. Gentleman is in favour of or against closing Magnox reactors, but he makes a valid point: employment is associated with nuclear stations in much the same way as it is with mining.

Inward Investment

Mr. Riddick: To ask the President of the Board of Trade what steps his Department is taking to encourage inward investment.

Mr. Heseltine: My Department's Invest in Britain Bureau runs a comprehensive programme for promoting the United Kingdom overseas. Lord Walker, who advises me on inward investment, is helping me to consider how we can step up our efforts to make them as effective as possible.

Mr. Riddick: Is my right hon. Friend aware that the OECD has forecast that Britain is likely to increase its share of world trade this year? Is not one reason for that, as Jacques Delors said, that Britain has become a paradise for overseas investment and is not that because the Government have tackled the excessive power of the trade unions and refused to sign the job-destroying social chapter? Is not that in stark contrast with the union-dominated Labour party, which seems to believe that only the state can generate economic growth—a view which not even the Russians believe nowadays?

Mr. Heseltine: My hon. Friend is right on that specific point, but, of course, there are many other reasons why this is now the most attractive part of the single market in which to invest. It is because of the Government's policies that 36.1 per cent. of American and 40.9 per cent. of Japanese direct investment in the European Economic Community comes to the United Kingdom.

Mr. Eastham: Although it is essential to encourage investment from abroad, may I impress on the Secretary of State a recent document produced by the Engineering Employers Federation? It is a most scathing report about the lack of support from the Government. Is it not about time that we also encouraged our industries so that they can participate and benefit, thereby increasing manufacturing in Britain?

Mr. Heseltine: That is a travesty of the views of the EEF with which I had a lengthy discussion last night. If the hon. Gentleman genuinely wants to encourage inward investment into this country he should persuade his party not to put the costs of the social chapter on British industry.

Mr. Streeter: Is my right hon. Friend aware that inward investment in the far south-west is largely dependent on the critical Plymouth-Heathrow airlink? Is he further aware that the airlink is increasingly under threat because of the increasing squeeze on regional services at Heathrow? Will he confirm that his Department will take whatever action is necessary to protect the Heathrow slot?

Mr. Heseltine: I know how important that issue is to my hon. Friend. I have no doubt that on my visit to the south-west later this week I shall hear more about it. We are in touch with the Department of Transport, but, as my hon. Friend will be aware, in the end much of the decision making lies with the private sector.

Mr. Gunnell: Does the Secretary of State agree that Japanese companies that come to this country in general bring with them very good working practices, usually including a negotiated agreement with a trade union and agreed conditions of work which far exceed those laid down in the social chapter? In those circumstances, will the Secretary of State explain how the social chapter can possibly be a deterrent to companies that, at home, implement working conditions of a higher standard?

Mr. Heseltine: It is not the working conditions but the working costs imposed by the social chapter which will be the deterrent.

Assisted Area Status

Mr. Ian Bruce: To ask the President of the Board of Trade if he will give a report on the progress of the application for Weymouth and Dorchester travel-to-work area to have assisted area status.

Mr. Sainsbury: The application for assisted area status for the Dorchester and Weymouth travel-to-work area is, together with all such other applications received by my Department, still under consideration.

Mr. Bruce: Surely my right hon. Friend and I have a community interest in ensuring that the minimum number of places need assisted area status. Could not action by the Department of Trade and Industry, in talking to the Ministry of Defence about moving thousands of jobs from an area of high unemployment to those of lower unemployment, ensure that we do not need to have assisted area status in Weymouth but can preserve the jobs and economy of that area?

Mr. Sainsbury: My hon. Friend does, of course, know that these are essentially matters for my right hon. and learned Friend the Secretary of State for Defence who, I know, will take my hon. Friend's views carefully into account. We shall also take carefully into account any implications for employment opportunity in the Weymouth and Dorchester travel-to-work area of any proposed moves by the Ministry of Defence.

Industrial Strategy

Ms. Coffey: To ask the President of the Board of Trade what plans he has to meet the Association of British Chambers of Commerce to outline his industrial strategy.

Mr. Heseltine: I and my officials regularly meet the Association of British Chambers of Commerce. We share the same interests in providing quality service to business. The association has involved my Department closely in the progress of its five-year development plan, and we are also working together on my one-stop shops initiative.

Ms. Coffey: I wonder whether the President of the Board of Trade is aware of increasing concern about the disadvantages faced by British businesses—small, medium and large—in competing against industries from other countries for export contracts, because of higher levels of support given by their Governments? That support is shown in a variety of ways. What proposals does the right hon. Gentleman have to rectify the situation for the benefit of British business?

Mr. Heseltine: It is extraordinary that, at every Question Time, Opposition Members seek to misrepresent the achievements of British industry in the export market. The hon. Lady' s question is simply not compatible with the fact that exports of manufactured goods, excluding erratics, are now at a record level–5 per cent. higher than in the last quarter, and 6.5 per cent. higher than a year ago. Why cannot the Labour party say how well Britain is doing, rather than run it down?

Mr. Nicholas Winterton: Does my right hon. Friend accept that I have considerable sympathy with the views that have just been expressed by the hon. Member for Stockport (Ms. Coffey), who, with me, is a panel member of the new manufacturing and construction industries


alliance, which is to be launched in just under a fortnight's time on 2 March? Does not my right hon. Friend accept that the national chambers of commerce believe that the country needs a new strategy to regenerate our manufacturing base? Will he therefore continue to advance the interests of this sector, which generates the only non-inflationary growth—the type of growth that this country needs?

Mr. Heseltine: I have come increasingly to recognise that my hon. Friend often finds himself in agreement with the views expressed by Opposition Members. I notice that, in his support for our manufacturing base, he seems to be prepared to vote more often against than with the Government whom he was elected to support.

Mr. Robin Cook: Why does not the President of the Board of Trade admit that his response to the collapse of DAF has shown up his lack of industrial strategy and the contrast with the industrial strategies of the countries of Europe? Is he aware that the Dutch and Belgian Governments are actively intervening to save jobs in their countries by agreeing to invest in the factories there? Can he explain why, when I met the Dutch Minister for Finance as recently as last week, there had been no ministerial contact from Britain in the nine weeks during which the Dutch had been working on a rescue package? Does not he understand that if Leyland DAF goes down, it will take with it scores of suppliers and thousands of skilled jobs? Cannot he see that if he does not even talk to the Dutch Government he will make it more likely that the axe will fall on British jobs?

Mr. Heseltine: Last week the hon. Gentleman was trying to undermine the British banks; now he is undermining the credibility of what the British Government are doing in these circumstances. He must know full well that my right hon. Friend the Minister for Industry has been in touch with his opposite number in the Dutch Government. He must know that we are in constant touch with the receiver and that we have kept in touch with the banks involved. If he searches his conscience he will find that he is aware that the best way to save parts of Leyland DAF is to give all possible support to the receiver, who is trying to do exactly that.

Sir Ivan Lawrence: Is it part of my right hon. Friend's industrial strategy to put an end to the iniquitous Arab trade boycott? If so, can he explain to the House why he did not raise that very important matter at his important meeting yesterday with the Middle East Association?

Mr. Heseltine: My hon. and learned Friend will realise, from his knowledge of the issue, that it is extremely complex and controversial. It is a matter of which the British Government are very conscious, but I did not think that it would be appropriate to bring it up in my speech yesterday.

Small Businesses

Mr. Simpson: To ask the President of the Board of Trade what plans he has to meet the Federation of Small Businesses to discuss projects for the small business sector; and if he will make a statement.

The Parliamentary Under-Secretary of State for Technology (Mr. Edward Leigh): My right hon. Friend the

President of the Board of Trade has no plans to meet the Federation of Small Businesses. My noble Friend the Parliamentary Under-Secretary of State for Consumer Affairs and Small Firms has frequent meetings with the federation and with all the major small firms organisations to discuss a range of issues.

Mr. Simpson: Is the Minister aware that in my city of Nottingham small business bankruptcies over the past year have risen by a record 70 per cent? When he extols the growth of new firms, does he realise that of the 4 million that grew last year almost one third–1.25 million—had a turnover of less than £15,000 per annum? Typically, such firms consist of a man with a van and bag of spanners, and they are no substitute for the good firms that the Government have driven into bankruptcy. Does the Minister now accept that this country needs a manufacturing strategy for the growth of small businesses, not the car boot sale that the Government currently offer?

Mr. Leigh: In fact, the number of small firms grows by about 400,000 each year, and has increased by more than two thirds since 1979. That has happened because we have created a culture of enterprise with low interest rates and low inflation. The hon. Gentleman might ask his own Front-Bench spokesmen how small firms would be helped by the tangle of no fewer than 284 quangos that would have overseen every small business in the country and tangled them up in red tape so that audits of the social cost of every business decision would have had to be made. That is Labour party policy, and it would have driven small businesses out of business.

Mrs. Peacock: Is my hon. Friend aware that some small businesses that go into receivership leave individual creditors who are not helped by the receivers? In the case of Acres of Wellswood in Torquay the receiver seems hell bent on protecting those who have gone bankrupt rather than helping the creditors who are about to lose their homes.

Mr. Leigh: My hon. Friend raises an interesting point. The official receivers have adequate powers to investigate company directors and, if there is any evidence of bad conduct, the courts have the power to disqualify directors from serving again. But some companies go out of business for genuine reasons, and once the receivers have investigated their past it is only fair that, in time, the directors should be able to start new companies.

Mr. Malcolm Bruce: Does the Minister accept that if and when the economy comes out of recession small businesses will provide the basic engine room of growth? From 1985 to 1987 small businesses employing fewer than 20 people created a million extra jobs, while large businesses created only 20,000. Does the Minister therefore accept that we now need a strategy to ease the burden on small businesses by cutting uniform business rate, raising the threshold of VAT cash payments, and recognising in numerous other ways that jobs and economic recovery will come from small businesses, because big businesses cannot provide that employment?

Mr. Leigh: The hon. Gentleman is right to emphasise the key role that small businesses play, and will continue to play in the economy. That is why the deregulation initiative by my right hon. Friend the Secretary of State is so important. My hon. Friend the Parliamentary


Under-Secretary of State for Corporate Affairs is considering the 7,000 regulations presently imposed on small businesses, and he will examine each and every one of them to ensure that the burdens on small businesses are reduced where possible. We shall continue our drive to reduce the general burdens on small businesses and to ensure that, whether it be in terms of low inflation, low taxation or low interest rates, they operate in a culture of enterprise. That is what we should aim to do.

Mr. Oppenheim: In connection with industrial strategy for businesses of all sizes, does my hon. Friend recollect that about five years ago his Department robustly resisted the entreaties of the boffins, the space buffs and the Opposition, and refused to take a large stake in the European Space Agency's Hermes project, which the then Chancellor of the Duchy of Lancaster described as a frolic in space? Is my hon. Friend aware that that project is now 40 per cent. over cost and running late, and that the Germans are threatening to withdraw? Does not that bear out our decision not to get involved? Is not the project exactly the type of grandiose industrial project into which the Opposition would pour billions of pounds if they ever got the chance again?

Mr. Leigh: My hon. Friend makes a fair point. The Minister then responsible for industry made a correct decision not to get involved in the Hermes project, which is hundreds of millions of pounds over budget. We have concentrated our space resources into earth observation, putting space to work and ensuring that British companies secure the orders and lead the world in environmental and space technology. That, rather than Opposition proposals for grandiose schemes about which they know little, is what is meant by a good industrial strategy.

Package Travel (EC Directive)

Mr. Denham: To ask the President of the Board of Trade what concerns have been expressed in the further representations he has received from the Association of British Travel Agents, the Consumers Association and trading standards officers in respect of the EC package travel directive.

Mr. Leigh: The Association of British Travel Agents and the Consumers Association have made clear their preference for a licensing system for all organisers of packages. The Government have rejected such a system as unnecessarily expensive and bureaucratic. My officials have been discussing with ABTA and with trading standards officers the interpretation of the directive and enforcement of the implementing regulations.

Mr. Denham: The Minister must be aware that last year 40,000 people, including many of my constituents, lost their holidays and their money through the collapse of the Land Travel Company. Given that the majority of reputable travel operators and consumer organisations believe that the bonding system which the Government support is an utterly worthless protection against unscrupulous cowboy operators, why does the Minister refuse to introduce a licensing system to protect holidaymakers against dubious and dodgy companies?

Mr. Leigh: The reason why we have rejected a licensing system, after careful thought, is that upwards of 30,000 small operators would be embroiled in the system;

therefore, the unit cost would be extremely high for those small operators and it would put up costs to consumers. We believe that the bonding and insurance arrangements that we have put in place are adequate protection for the consumer. Indeed, the consumer is protected for the first time. We do not believe in imposing on business unnecessary burdens which drive people out of business and put up costs to consumers.

Mr. Allason: Is my hon. Friend aware that in many parts of the country trading standards officers are regarded as the enemy of business and that they are imposing intolerable burdens on small businesses? Is he aware also that in my constituency, for example, hoteliers are obliged not just by trading standards officers but by others in the local bureaucracy, such as environmental health officers, to clean and paint the ceilings of their kitchens with disinfectant twice a day to ensure that they are completely free of contamination? That is the kind of burden which is driving small businesses out of business.

Mr. Leigh: Trading standards officers have an essential role to play in society and they perform their duties with great skill and diligence. We in the Government pay tribute to their work. At the same time, it is important that, as part of my hon. Friend's deregulation initiative, we look at all 7,000 regulations which are imposing burdens on business and that we ensure, particularly with regard to European directives, that we do what is necessary to carry out the spirit and the letter of the law. We should not go over the top and overburden business with burdensome regulations.

Mr. Faulds: On a technical point of order, Madam Speaker.

Madam Speaker: Order. I can take neither a technical nor any other point of order in the middle of Question Time. I am sorry; the hon. Gentleman will have to bide his time.

Mr. Nigel Griffiths: What assurance will the Minister and the Government give that another Land Travel type of collapse will not happen this year when ABTA says that his weak laws and lax supervision put thousands of holidaymakers at risk?

Mr. Leigh: As usual, the hon. Gentleman grossly overstates his case. He knows that, whatever directives are in place, whatever laws are laid down and however many burdens are imposed on business, it is impossible to ensure that there will never be another Land Travel in future.
We cannot regulate against people acting corruptly or lying to trading standards officers and to overseers of their business. That is fact. In the directive we have created a balanced measure which provides protection to consumers for the first time. It provides a proper bonding and insurance scheme. At the same time, we have resisted a burdensome over-regulatory licensing system which would have covered no fewer than 30,000 small operators, including even those who provide fishing weekends in Scotland. The licensing system that the Opposition would impose on business would push up costs for all consumers. [Interruption.]

Madam Speaker: Order. It seems that not all hon. Members on the Opposition Back Bench can hear. Perhaps something can be done about that.

Mr. Dykes: Does my hon. Friend have the same objection to licensing for business and incentive travel operators?

Mr. Leigh: We have tried to keep a fair balance for business travel. Business travellers are as entitled to protection as ordinary consumers are and that is why we have decided, after considering all the arguments, that business travel should be covered by the directive.

Regional Assistance

Mr. Morgan: To ask the President of the Board of Trade if he will make a statement on the future geographical boundaries and funding of regional assistance to industry.

Mr. Sainsbury: We are carefully considering the many representations put forward on the review of the assisted areas map.

Mr. Morgan: Does the Minister accept our concern that, as well as having no industrial strategy, the Government do not appear to have a regional strategy? Or does he mean us to accept that the Government have sneaked out an unannounced regional policy of devastating the economy of the south-east of England so much that the old smoke-stack areas of Scotland, Wales and the north are made to look not quite as bad by comparison? Will there be a budget for regional policy when the review, which is three or four months late, is eventually announced or has the Chief Secretary to the Treasury persuaded the Minister that we do not need a regional policy or a regional budget any more?

Mr. Sainsbury: The hon. Gentleman is as wrong about regional policy, as he is about industrial strategy. If he looks at the many documents available on the Government's expenditure plans, he will see plenty of evidence of a budget to support industry regionally.

Mr. Knapman: Is there a danger that regional assistance will distort trade? Will my right hon. Friend confirm that business should always be based where it is most efficient?

Mr. Sainsbury: I very much agree with my hon. Friend that it must always be in the interests of business to seek to make itself as efficient as possible, including when it takes location decisions. When we consider applications for regional selective assistance, we take into account any possible displacement of activity elsewhere.

Mr. Fatchett: With unemployment just about to go above 3 million and with once prosperous areas in the south-east and the south of England now facing record levels of unemployment, is not it clear that the Minister is unable to draw a map for regional assistance simply because his Government's economic failures have hit every part of the country? Is not that the reason why Conservative Members, who were previously against Government intervention and who used to call regional aid "Government handouts", are now crawling to his Department asking for assistance for their constituencies?

Mr. Sainsbury: We believe that regional selective assistance should be targeted accurately to where it is most needed. In determining where it is most needed, we should take account of a wide number of factors, including long-term and current unemployment and peripherality.

We are considering the matter carefully and we shall not be rushed into making decisions that might mean that the map is less accurate than it should be.

Mr. Barry Field: Does my right hon. Friend understand that the reason he has heard so much today from hon. Members representing constituencies from Dorset to Dover, including the Isle of Wight, about assisted area status and the Government's regional policy is that we are fed up with having businesses hijacked to Wales and to Scotland, which get a disproportionate amount of British taxpayers' money? What we want is somebody to speak for England.

Mr. Sainsbury: My hon. Friend speaks most effectively for the Isle of Wight.

Mr. Wigley: May I speak for Wales? Does the Minister agree that the drawing of the map for regional purposes in the United Kingdom can have a critical effect on the eligibility of certain areas for finance from the European Community? Will he confirm that his Department has made direct representations to the European Commission in Brussels to ensure that whatever the outcome of the map, areas that have been dependent on European finance will not miss out in future?

Mr. Sainsbury: We are waiting for the proposals from the Commission for the review of the objective 2 areas. They are expected later this year. We have made representations to the Commission with regard to objective 1 status.

Deregulation

Mr. Steen: To ask the President of the Board of Trade how many regulations the deregulation unit has (a) approved and (b) abolished in each of the last three years.

Mr. Neil Hamilton: The deregulation unit, unfortunately, does not possess arbitrary powers, as my hon. Friend seems to imply in his question, to approve or to disapprove particular regulations. Our role is to drive forward the deregulation initiative in government. My job is to crack the whip over my colleagues and to ensure not only that we make good progress, but that we have a good time while doing do.

Mr. Steen: The Under-Secretary may be slightly too young to remember this, but some 10 years ago, the then Prime Minister said that we would get the Government off the backs of the people by having fewer rules and regulations. In fact, we have never had so many rules and regulations as we have had in the past 10 years. What am I to say to hoteliers, those in the construction industry and retailers to make them believe that the country will change dramatically under the leadership of the new Prime Minister and my hon. Friend's Department and that they will get rid of some of those rules and regulations, which are crippling small businesses, hoteliers, the construction industry and everyone else?

Mr. Hamilton: The difference is that, this time, the initiative is being taken by my right hon. Friend the President of the Board of Trade and me. We have the full and enthusiastic support of the Prime Minister. Having recently completed an audit of all the regulations currently in force, we have set up a series of task forces of business


men to involve the private sector—those whom my hon. Friend mentioned—which will be able to put the case for business.
I agree that when business is saddled with excessive costs, those costs are felt not only by businesses themselves but in lost jobs and reduced economic prosperity. On this occasion, therefore, we intend to proceed by requiring cost compliance assessments and risk assessments to take fully into account the cost to British business of any regulations that we introduce or allow to continue. Only where the benefits to the public at large outweigh those costs will the regulations survive.

Mr. Cryer: But is not the reality that the Government, who are supposedly pledged to take regulation off the people's backs, produced 3,439 statutory instruments in 1992? That is more delegated legislation than has ever been produced and forced through Parliament by any Government at any time. Is not that situation compounded by the fact that the self-same Government continue to deny the Opposition opportunities to debate prayers against such instruments? Is it not a mark of a centralised elected dictatorship that that torrent of legislation is turning Parliament into a sausage machine?

Mr. Hamilton: Many of the hon. Gentleman's Friends have spent much of the past few decades supporting unelected dictatorships in other parts of the world. I might add that the hon. Gentleman makes a most unconvincing apostle of laissez-faire. I appreciate the fact that the hon. Gentleman's knowledge of the statutory instruments procedure is profound and that he has played an important part in the constitutional affairs of the House in ensuring that many such instruments are debated. I share his zeal—if that is what it is—to reduce the quantity of legislation with which we have to cope. It is certainly not in our interests to saddle our businesses with more and more costly regulations of the kind that the Opposition even now are seeking to advance through the social chapter, which would impose—if we were to give in to it —enormous costs on British business, so reducing the employment-creating potential of the economy that the Opposition affect to want.

Exports

Mr. Evennett: To ask the President of the Board of Trade what initiatives his Department is taking to promote exports.

Mr. Needham: The United Kingdom exports £400 per person per year more than Japan. I am sure that my hon.

Friend will agree that that is very good, but it is not good enough. That is one of the reasons why I launched a comprehensive policy last year, a copy of which I have sent to my hon. Friend.

Mr. Evennett: I thank my hon. Friend for his reply. Does he agree that export insurance cover is a component part of any export strategy? Will he confirm that his Department will continue to encourage exporters and to give them all the help and assistance that they need to do a good job for Britain?

Mr. Needham: Yes. That is why, as I said in an earlier answer, we announced a further £700 million in the autumn statement, and why the Government are determined to support our capital goods industry in its effort to double its sales over the next five years.

Mr. Bell: The House will welcome the Minister's statement that we are to try to double our exports of capital goods over the next five years, but how does he expect the House and the country to accept his claim that he supports exports when Leyland DAF, which exports £1,000 million-worth of products a year, faces closure, with 5,000 jobs in that industry and a further 15,000 jobs in subsidiary industries at risk? Does the hon. Gentleman suppose that the House will believe him?

Mr. Needham: As far as capital goods exports are concerned—which I was talking about—if one looks at power generation, airports, upstream or downstream oil and gas exploration and the whole range of industries, the United Kingdom has an endless number of companies of the highest quality, many of which are in the hon. Gentleman's constituency. Conservative Members and Ministers spend most of their time supporting those industries, and Opposition Members spend most of their time denigrating them.

Mr. Gallie: Is the Minister aware that a Scottish company won a contract in March 1992 for the supply of boiler tube to Taiwan, an export licence was rejected in April, an appeal was launched, and nine months later that appeal has not been answered? Is he aware that the Spanish have supplied the boiler tube in the mean time? Will he note that a larger contract and more jobs for Scotland are at stake? Will he do whatever he can to expedite the appeal?

Mr. Needham: Of course I will look into my hon. Friend's comment. It is the first time that he has brought it to my attention. Clearly, when it comes to export licensing, it is absolutely crucial that investigations take place to ensure that the export licence is appropriate.

Points of Order

Mr. Andrew Faulds: On a point of order, Madam Speaker. You may not be aware, since you were forced to change your seating arrangements in the House, that there are many places in the Chamber where the system for letting Members listen to the little loudspeaker on the back of Benches no longer works. That is primarily probably due to the fact that the enunciation of most Members is appallingly poor. They do not know—[Interruption.] You can hear me, laddie.
There are two other possibilities. One is that the technical competence of the people who service the little things on the back of the Benches—

Mr. Tony Banks: I am not a little thing. [Laughter.]

Mr. Andrew Faulds: This is serious for those of us who are elderly and short of hearing.
It may be that their competence is somewhat lacking. The most likely explanation is that, since the malign introduction of radio and television into the Chamber, these little speakers on the back of the Benches are turned down so that they do not interfere with the output of the radio and television transmission. Could you please examine the problem? Otherwise, I might as well sit at home holding my wife's hand and having a cup of coffee. I would hear the proceedings of the House much more easily if I relaxed in that fashion.

Madam Speaker: It could also be that the noise in the Chamber often makes it difficult for Members in various parts of the House, as well as the Speaker, to hear what is going on. I have noted what the hon. Gentleman said and it will certainly be attended to.

Mr. Nicholas Winterton: On a point of order, Madam Speaker. In view of the flagrantly inaccurate, dishonest and inadequate response to my supplementary question—

Madam Speaker: Order. [Interruption.] Order. I can deal with this matter. I am sure that the hon. Gentleman used a word which he will withdraw. I do not wish it to be used in the House. No one is dishonest here.

Mr. Winterton: If you feel, Madam Speaker, that it is unparliamentary, I can only say that my right hon. Friend knows that what he said was inaccurate. If that is not dishonest, I do not know what is.

Hon. Members: Withdraw!

Madam Speaker: Order. The hon. Gentleman is a long-standing parliamentarian and a member of my Chairmen's Panel. I am sure that he will rephrase what he has to say.

Mr. Winterton: Madam Speaker—[HON. MEMBERS: "Say 'economical with the truth'."] I am being helped by hon. Members on both sides of the House. I believe that my right hon. Friend, on mature consideration, will realise that in responding to my question he was being very economical with the truth. As a result, if I say that a response was dishonest, I am honourable enough—and, indeed, I have been here long enough—to accept the advice which you give from the Chair. I will withdraw the word "dishonest" in respect of his comments, which were clearly totally and flagrantly inaccurate.

Madam Speaker: I am obliged to the hon. Gentleman.

Mr. Roy Beggs: Would you, Madam Speaker, give guidance to hon. Members as to the propriety of any hon. Member releasing to the press the contents of a speech intended to be made during debates in the Chamber and allowing it to be published as if it had been made, although it was never made? Would it be reasonable for the hon. Member or hon. Members involved to provide follow-up press releases stating that the speech was not made?

Madam Speaker: If what the hon. Gentleman says is correct—I have no reason to believe otherwise-1 hope that the practice will cease forthwith. I caution the House that any speech which is not published in Hansard, although it may be published elsewhere, is not a parliamentary proceeding and is therefore not privileged. All hon. Members should be made aware of that.

Mr. Tony Banks: On a point of order, Madam Speaker. As you know, I am not one of life's whingers, even though I have to sit next to my hon. Friend the Member for Warley, East (Mr. Faulds) and translate for him during the proceedings, but you may recall that this is the second day running that my question has failed by one to be reached. I wonder whether you would consider abolishing Prayers. They are clearly not a popular institution, and they deprive me of the opportunity to raise important issues.

Madam Speaker: I have never thought that the hon. Gentleman has been very much deprived in his public life.

Cycling Safety

Mr. Andrew Robathan: I beg to move,
That leave be given to bring in a Bill to make further provision for the safety of cyclists on highways; to encourage greater use of the bicycle; and for connected purposes.
For the benefit of the hon. Member for Warley, East (Mr. Faulds), I shall attempt to enunciate properly.
Outside the House, traffic is crawling up to Parliament square. The rush hour is building up, and millions of citizens throughout the country will waste millions of hours sitting in their cars on their way home. That position is unlikely to improve, because the long-term forecasts for traffic growth are horrendous, as the House will know.
Those millions of vehicles will pump more carbon monoxide and pollution into the air of our cities. In the past two years, we have seen smog return to London. It may not be like the old pea-soupers, but it is a potent and unpleasant mix. Carbon monoxide and exhaust emissions go up into the atmosphere to contribute to global warming. In Britain, as elsewhere, we are committed to reducing carbon emissions.
The life of all those who live near roads is further degraded by the incessant noise of traffic—[Interruption] —and by the hon. Member for Bolsover (Mr. Skinner). Traffic and congestion continue to increase. Cycling can help ease the congestion and pollution. More than 60 per cent. of journeys by motor car cover a distance of less than five miles—well within the range of most cyclists.
Already, approximately 200,000 bicycle journeys are made each day by commuters into and out of London. Cycling is clean, non-polluting, cheap and accessible t o all. Cyclists rarely cause traffic jams. Cycling is an excellent option for short journeys: it is quiet; it can be relaxing and therapeutic; it can be healthy and it is recognised as an excellent form of aerobic exercise. It is a popular form of recreation in the lanes of Leicestershire and in my constituency. Indeed, I can find little disagreement with the idea that we would be wise to encourage cycling, especially in urban areas, but also for recreation.
The traffic management chairman of the corporation of the City of London was quoted on Monday as saying:
We are keen to encourage cycling as an environmentally and economically sound way to travel around the City 
I have mentioned the City of London for the benefit of those on the Opposition Front Bench, to show that cycling is hardly a fringe activity of relevance only to those poor people who cannot afford cars, or to weirdos who for some strange reason prefer to battle through wind and rain rather than sit in a warm and comfortable car.
My county of Leicestershire has an excellent cycling strategy, which has the objective of increasing significantly the proportion of trips made by cycle in its urban areas. The Department of Transport, which wishes to encourage cycling, does not disagree. I know that my hon. Friend the Member for Lincoln (Mr. Carlisle), the Minister for Roads and Traffic, understands the value of cycling as a means of local transport. His Department has been encouraging local highway authorities to provide safe and convenient cycling facilities.
The benefits of increased cycling are obvious: there is little disagreement about them. There has been an encouraging increase in the sale of mountain bikes, but sadly there has been no marked increase in cycling—indeed; there is anecdotal evidence of cyclists abandoning

two wheels for four, especially in urban areas. The perception of danger is the main reason, and it is a very real danger. A Department of Transport study claimed that cycling is between 16 and 18 times more dangerous than driving over a given distance. Although those statistics do not tell the whole story, they point to a real reason for not getting on one's bike.
My brother, who cycles to work from Clapham to Westminster, has been knocked off his bicycle three times, yet to the best of my knowledge he has never had an accident in a car. The problem is not merely the reality of danger but the threat of it. Anyone who has cycled recently knows how much more intimidating and aggressive drivers have become as the amount of traffic on our roads has grown. A friend told me this morning how a double-decker bus had squeezed him into the pavement on Regent street and forced him off the road. That happens far too often when cycling in our cities.
I fear that most hon. Members have not cycled much since they were children or students.

Mr. Harry Greenway: What about tricycling?

Mr. Robathan: Yes, perhaps some have tricycled.
Instead, hon. Members perhaps share the worries of most parents and grandparents about allowing children to go out on the roads on their bicycles. There are other dangers, as we have all too sadly witnessed this week, but the fear of traffic has led to a marked decrease in children cycling to school, which means that parents drive them there by car, thus causing even greater congestion.
A long time ago, when many hon. Members had more hair and it was perhaps somewhat darker, most of them would have taken their driving test at a time when the highway code suggested:
All drivers should give a pedal cyclist a wide berth of at least six feet.
I wonder how many Members have been able to do that when driving recently. The highway code has now dropped that advice.
As further evidence of increasing intimidation on our roads, one might look no further than the House of Commons Cycling Club, which I am told used to have upwards of 50 members. The club folded in 1983, largely due to the increasing danger on our roads.

Mr. Dennis Skinner: No, it was because they did not get enough free trips.

Mr. Robathan: It may also have been because they were intimidated by the hon. Member for Bolsover.
The increasing volume and speed of traffic leads to drivers cutting up cyclists, cutting in front, squeezing past, trying to nip through where there is insufficient space. It is depressing to note that more and more cyclists are being hit from behind—a sign that drivers are not giving them enough room. That is an example of drivers showing lack of due care and attention, for which they are now likely to be charged with careless driving.
However, any motorist who has already struck a cyclist has endangered life—if it was the motorist's fault. As a parallel, any driver who has drunk a certain amount automatically loses his or her licence, if caught. Although I applaud that, the driver may not even have seen another road user and may not have been able to endanger life.
I propose that a special measure should be introduced so that, after any accident in which a driver, through his or


her bad driving, hits a cyclist, he or she will be charged with dangerous driving. If found guilty, the driver would automatically be disqualified from driving.
The purpose of the Bill is to change attitudes on our increasingly crowded roads. The current attitude was illustrated this morning by one hon. Member who told me that he would ban all cyclists from the streets of London. That is not a constructive policy or one that is shared by any political party as far as I know. We need to change that negative attitude, of which we are all guilty when we hide behind the wheel of a motor vehicle. That attitude usually means that any vulnerable road user—be he pedestrian, equestrian or cyclist—is judged an obstruction, a nuisance or a problem, whereas, on the contrary, the problem is that there are too many cars being driven badly and too fast. Very few motorists are killed by cyclists, but the converse, sadly, is not the case.
The Bill recognises the need to encourage cycling and to encourage people to get on their bikes, and to discourage selfish driving by motorists. I commend it to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Andrew Robathan, Mr. Peter Bottomley, Mr. Harry Greenway, Mr. Simon Hughes, Mr. Keith Mans, Mr. David Nicholson, Mr. Anthony Steen, Mr. Gary Waller and Ms. Joan Walley.

CYCLING SAFETY

Mr. Andrew Robathan accordingly presented a Bill to make further provision for the safety of cyclists on highways; to encourage greater use of the bicycle; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 12 March, and to be printed. [Bill 138.]

Orders of the Day — Trade Union Reform and Employment Rights Bill

Order for Third Reading read.

The Secretary of State for Employment (Mrs. Gillian Shephard): I beg to move, That the Bill be now read the Third time.
The Bill has been debated for 56 hours in Committee and for seven hours on Report. I have no doubt that the amendments that the House has accepted on Report will improve and strengthen the Bill. The great majority of the amendments that the House has accepted over the past two days are a direct response to points raised by the Opposition when the Bill was in Committee. I am happy to pay tribute now to the vigilant and serious way in which the Opposition approached many parts of the Bill in Committee. It is in large part because of the constructive spirit of the debates in Standing Committee that we can say that the Bill which goes to be debated in another place is an even better Bill than the one that we debated on Second Reading.
The Bill is, above all, a Bill that creates new rights for people at work. It gives every woman in employment a right to 14 weeks' maternity leave, regardless of the number of hours she works or the length of her service. It gives every woman the right not to be dismissed because she is pregnant or because she exercises her statutory right to take maternity leave. It gives every employee who works more than eight hours a week the right to receive a written statement explaining his or her basic terms and conditions of employment. It gives important new rights in relation to health and safety: it provides protection against dismissal for safety representatives carrying out their duties and for employees who have to leave their work because of imminent risks to their health and safety.
The Bill also gives important new rights to all trade union members. For the first time, the Bill gives employees the right to join the union of their choice—not the union chosen for them by a Trades Union Congress committee. For the first time, it gives trade union members the right to a postal ballot, before a strike, and the right to have that ballot independently scrutinised. It gives all union members the right to decide for themselves how they pay union subscriptions. It gives all union members new protection against mismanagement of their union's finances and new protection against fraud and abuse in union elections.

Mr. David Winnick: As the right hon. Lady knows, we believe that the Bill undermines existing rights in many respects and jeopardises people's rights in certain occupations. Does she recognise that, at a time when, on the official figures, it will shortly be announced that more than 3 million people are unemployed-the true number is probably nearer 4 million—she should come to the House with measures to give rights to our fellow citizens who are denied the right to work? Instead, she is today dealing with largely irrelevant matters at the expense of the crucial issues for the economy.

Mrs. Shephard: We do not think that the rights of workers and trade union members are ever irrelevant, and I am extremely sorry that the hon. Gentleman should give the impression that he and his hon. Friends take a different view. Later in my speech, I shall make some points about employment and unemployment; but I remind the hon. Gentleman that the stance adopted by him and his hon. Friends on some of the issues covered by the Bill does not suggest that they believe that employment will come from reducing burdens on employers.
The Bill will increase the safeguards against the damaging effects of strikes. It will help to preserve the remarkable transformation in this country's industrial relations record, which has seen the number of days lost through strikes fall to an all-time low. In future, trade unions will have to give employers at least seven days' notice of their intention to call a strike. That will help to overcome the damaging effects which strikes called at short notice can have on business, on jobs and on the life of the community. Also, of course, the Bill gives every citizen an entirely new right to seek the protection of the law if he or she is the victim of unlawful industrial action. No longer will customers be defenceless in the face of unlawful strikes that deliberately seek to cause disruption to services on which people rely.
When I introduced the Bill in the autumn, I made it clear that there was another important theme, as well as that of increasing individual rights. The Bill also includes important measures to increase the competitiveness of the economy and to remove obstacles to the creation of new jobs.
Much debate on the Bill in Committee and last night focused on the proposal to abolish the remaining wages councils. We heard further predictable speeches by Opposition Members during the debate on Report, and doubtless we will hear more this afternoon. But to force employers to pay wages that they cannot afford—whether via the wages councils or via a misconceived national minimum wage—will simply destroy jobs. We do not need to establish a Commission on Social Justice to demonstrate that.

Ms. Angela Eagle: Is the Secretary of State saying that it is acceptable for the state to subsidise employers who pay poverty wages instead of deploying some minimal protection to ensure that workers-often vulnerable workers—are not exploited by bad employers? Is it right that the taxpayer should pick up the tab for that sort of behaviour?

Mrs. Shephard: It is extraordinary that, when faced with a proposal that will help to bring about greater flexibility in the labour market and remove an unnecessary barrier to the creation of new jobs, Labour Members should oppose it.

Mr. Roy Beggs: What research has been carried out into companies that have become insolvent to show whether they went bankrupt because of the high wages being paid to their employees?

Mrs. Shephard: I am not clear whether the hon. Gentleman was present for last night's debate. If he was, he will have heard my hon. Friend the Minister of State make the point that 90 per cent. of employers who made representations were in favour of the abolition of wages councils. Those who oppose their abolition ignore the

evidence that they inhibit the creation of new jobs, and refuse to accept that regulation and red tape can only hinder enterprise. They fail to notice that 90 per cent. of industry successfully negotiates wages without the need for statutory interference.
I am sorry that seems to be the face of the modern Labour party. Is it still wedded to binding statutory regulations and to armies of Government inspectors? Is it clinging to the belief that Labour could run businesses better than business meu and women? Is it still in hock to the vested interests of trade unions?
My hon. Friend the Minister of State blew the gaff on the Opposition's policy on wages councils almost before the debate began, on the Bill's Second Reading last November. He challenged the hon. Member for Holborn and St. Pancras (Mr. Dobson) to say whether Labour would re-establish wages councils after they had been abolished. [HON. MEMBERS: "Oh."] We had to ask that question, because we had not received an answer.
The hon. Member for Holborn and St. Pancras struggled then to provide a coherent answer.

Mr. Frank Dobson: indicated dissent.

Mrs. Shephard: Three months later, all we have is a form of words to which, to be very complimentary, a weasel would not put its name. [Interruption.] The hon. Member for Holborn and St. Pancras shows that he is still a bit sensitive about the matter. Perhaps he will tell the House his latest policy. Perhaps he will confound the commentators by explaining how a national minimum wage can possibly create jobs. If he does, let us hope that the hon. Member for Kingston upon Hull, East (Mr. Prescott) is listening.

Mr. Dobson: As I said on Second Reading and several times in Committee, and as I made clear in a letter to the Secretary of State—when she employed public officials to peddle lies about Labour party policy, for which she has still not apologised—[HON. MEMBERS: "Oh."] I am not accusing the hon. Lady of lying but saying that she permitted public officials to peddle lies, and that comment is not out of order.
We said that, if the Government achieved the abolition of wages councils, the incoming Labour Government would be faced with no existing wages councils. Our first priority will be to establish a national minimum wage. As I made clear all along, we are consulting people working in industries, their representatives, and various organisations throughout the country that have, over the years, shown a deep and abiding interest in the welfare of the low paid to see whether further special machinery may be necessary to protect the special interests of those who have been most exploited.
That ought to be clear. There are no weasel words there. If the hon. Lady does not understand that statement, I do not know why. I hope that, in future, public officials will, at the taxpayers' expense, make it clear that that is Labour's policy—not the lie that they have peddled to date.

Mrs. Shephard: The hon. Gentleman merely confirms the impression that he gave on Second Reading—that Labour does not have a policy in that respect.
Wages councils have long outlived their usefulness. The Bill will bring their activities to an end, and let us hope that


we never have the opportunity to discover whether the hon. Member for Holborn and St. Pancras would try to bring them back.
The Opposition claim to care about the level of unemployment and the fate of people who are unemployed. They continually urge the Government to provide more assistance and support, while ignoring or denigrating the wide range of employment and training measures already in place
The Oppposition have opposed every training programme and every measure to help unemployed people introduced since 1979. The conversion to the merits of training demonstrated today by the hon. Member for Dunfermline, East (Mr. Brown) was an amazing U-turn even for Labour. The Opposition continue to claim that they care about the unemployed but on radio last Sunday, when asked what Labour would do, the hon. Member for Holborn and St. Pancras had no answer. He wishes to woo the unemployed; he wants to win the favours of people facing the problems of world economic recession. What does he do? He insults business men. No doubt he would describe those who come here from Japan, America or France to build factories, create jobs and increase our prosperity not merely as incompetent scum, but as alien incompetent scum.

Mr. John Garrett: The Secretary of State knows very well that the Norfolk and Waveney training and enterprise council, which is in her area, is unable to provide the level of training that is needed in her constituency and mine, particularly for young people. A number of representations have been made to the right hon. Lady, but she has done nothing about them. She has shown no sympathy for the plight of the young unemployed and untrained.

Mrs. Shephard: The hon. Gentleman knows that my Department's budget is increasing in real terms, and that fewer young people are applying for youth training because of the welcome increase in the staying-on rate. He may not know that I have taken a great personal interest in youth training in Norfolk, and that, by tomorrow, every young person will certainly have been offered a place. The hon. Gentleman likes to pretend to take a close interest in such matters. If that interest is genuine, it is a great pity that he has not informed himself of the facts.

Mr. Dobson: I am not in the habit of intervening unless I am referred to personally. Can the right hon. Lady produce chapter and verse for my description of any foreign investors as "alien"? If she is going to quote what I said about millionaires who want to line their own pockets even more by driving down the wages of some of the worst paid, she should note that I did not describe them as thieving incompetents; I described them as thieving scum.

Mrs. Shephard: I am grateful for that elucidation—as, I am sure, are all hon. Members and all employers and business men. I am also delighted that the hon. Gentleman rejects the TUC's description of people who come here offering inward investment projects as "alien".
At a time of high unemployment, the hon. Gentleman would sign up to the social chapter that the Prime Minister rejected at Maastricht. I wonder whether he has calculated

the number of jobs that that would destroy. As an incentive to training, he proposes to place a levy on employers—to put a tax on jobs. How many jobs would that destroy? His latest idea is to subsidise jobs by taxing the utilities—to place a tax on success. That is a really positive message for business!

Sir Teddy Taylor: Given her great knowledge of these matters, can the Secretary of State give an example—any example—of an EC measure that could be moved under the social chapter but cannot be moved under existing Community legislation?

Mrs. Shephard: In view of my hon. Friend's persistent opposition to the social chapter, I am sure that he agrees that it would destroy jobs, strangle the creation of employment and place crippling burdens on business. I have always understood that to be his position.
During the Bill's passage, Opposition Members have not demonstrated that they understand how jobs are created. Jobs result from firms competing in world markets, and delivering the goods and services that customers want and will buy, on time and competitively priced. Government's role is to create a sound economic climate, in which businesses can grow and jobs can be created. Part of that climate is the good industrial relations that the Bill will help to maintain, building on our previous reforms.

Mr. Winnick: The Secretary of State says that the Opposition's policies would destroy jobs. Is she not aware that, when her party came to office in 1979, a total of 1 million were unemployed? As she knows only too well, even the official figure is now 3 million—and, had not the system of calculation been changed, it would be nearer 4 million. Who are destroying jobs? Are they not being destroyed by the right hon. Lady's Government, and is she not directly responsible for policies that destroy jobs and small businesses day in, day out? She owes us an apology, rather than a lecture.

Mrs. Shephard: The hon. Gentleman knows well from our exchanges in the House that I am extremely concerned about the plight of anyone who is unemployed. He ignores the fact that we are in a world recession and that we share the problem of rising unemployment with every other major industrialised country, among which we had the best possible record, as corroborated by the OECD, for job creation in the 1980s. Curiously, Labour Members find it convenient to forget that fact.
I was disappointed that the Opposition chose to vote against clause 34 in Committee, which means that, in future, arrangements will be made for careers services to be provided by whomever can best and most successfully do so in each area. I had hoped that they would have welcomed the greater freedom and flexibility that this will bring for services to respond effectively to the needs of local communities.
The principles underlying the provision of the service will remain unchanged. There will, of course, be a free service delivered by professional staff to a core client group of young people, but there is no doubt in our minds that the overall quality of the service can be raised. The high standards achieved by the best should be available in all parts of the country.

Mr. David Hanson: What assurances will the Secretary of State give the House that there will be a


quality threshold to ensure that the quality that she says she seeks is maintained? No assurance was given in Committee about any form of quality threshold, and any Tom, Dick, Harry or Harriet could now set themselves up as a careers officer.

Mrs. Shephard: The hon. Gentleman is right to ask about quality, which is important and which was fully discussed in Committee. He will know that we have undertaken to consult about how to prepare the guidance that will be issued on setting up the new services. We must be committed to the provision of high-quality and responsive career services, because much depends on them. We want to see careers services develop so that they are well placed to meet the needs of potential clients and customers in a dynamic economy, which is what underlies this important reform. Once in place, they will bring rich rewards.
When I moved the Second Reading of the Bill, I reminded the House that the Labour party claimed at the last election that, if elected, it would keep the trade union legislation of the 1980s, despite the fact that it had voted against every trade union Bill since 1979. I said then that many people doubted whether its conversion to the cause of trade union reform was genuine, but that I was prepared to keep an open mind until we learned what attitude it would take to the Bill.
I urge Labour Front-Bench spokesmen not to make the same mistake as all their predecessors by voting against the Bill, only to admit in a few years' time that the reforms that it introduces are here to stay. I urge them to break out of the cycle of unthinking opposition followed by embarrassment and half-hearted acceptance. That has been their record on such vital issues as strike ballots and the closed shop. They did not take my advice, and voted against the Bill on Second Reading, and they may vote against it tonight.
We have heard much recently about the Opposition's conversion to the cause of the individual. We have even heard that they have discovered the importance of small business, but there has been little sign of that in our debate.
Let us examine the Opposition's commitment to the individual in some of their amendments. They would give a worker the right to join a trade union of the TUC's choice. They would give an employee the right to be paid a minimum wage, which many employers could not afford to pay, even if that meant people losing their jobs. They would give a consumer—for example, a commuter-the right to be left stranded and helpless if the service on which he depended was disrupted by an unlawful strike.
Is that how the Opposition believe that the interests of the individual are best served? How can they possibly claim to believe in the individual when they would deny people the right to choose and decide for themselves'? How can they claim to support the interests of small business when they have lost no opportunity to press for new burdens and new regulations to be imposed on employers? That is why they have opposed the ending of wages councils, despite the fact that the previous Labour Government abolished 11, which covers about 600,000 employees, and despite the fact that we do not know what their future policy on wages councils is.
In their attitude to these important parts of the Bill, the Opposition have, I am afraid, revealed a tired old face, that of socialist dogma. The truth is that the gap between the Opposition and the Government on industrial relation

sand trade union reform is as wide as ever. While the Government have advanced step by step in reform, the Opposition have been reduced to a grudging step-by-step retreat.
In the Bill, the Government are looking forward to the industrial relations and employment needs of the rest of the 1990s and into the next century. We shall continue to create a climate in which business can compete effectively and in which employees as individuals have the opportunities and protection which they are entitled to expect.
The Opposition are still looking backward, back to the days when the rights of the individual employees and trade union members were subordinate to those of the trade union bosses, and back to the time when initiative and individual responsibility was stifled by over-regulation and collective organisation. We all know where that led us.
This evening, the Opposition have another chance to shake off the shackles of the past. I urge them to vote on behalf of the individual employee, the individual trade union member and the individual citizen, rather than on behalf of the vested interest groups which have so often dictated their damaging policies in the past. Let them use the opportunity to show that their new-found concern for the individual is more than empty rhetoric and more than bluster.
I commend the Bill to the House.

Mr. Frank Dobson: One way or another, we have been considering the Bill for three and a half months. Perhaps uncharacteristically, I begin by thanking the Minister of State and the Under-Secretary of State, the hon. Member for Derbyshire, West (Mr. McLoughlin), for their helpful and constructive responses to a number of suggestions that we made in Committee, which resulted in the Government undertaking to make about 20 distinct improvements to their original proposals. Seventeen of those improvements were delivered by way of amendments on Report and three, I am assured, will be delivered by way of amendments in another place. I am grateful to the Government for that.
I also wish to thank my colleagues who served on the Committee that debated the Bill. Having served on Committees where we have lost arguments, I must say that it was a pleasure to serve on a Committee where I do riot think that we lost a single argument. Indeed, it must be said that the Government proffered no arguments on the issue of wages councils.
We dealt with the Bill in detail in Committee and in further detail on Report yesterday, so it behoves me to concentrate on a limited number of aspects. The first is low pay; the second the way in which the Government have knowingly robbed people of their rights for the past 10 years; the third is the Government's failure to introduce comprehensive maternity cover and to take the opportunity to get rid of the current shambles; and the fourth is their proposal to sell off the school careers service.
Those four aspects cannot be separated from two general matters. One is the general employment situation, which especially affects the low paid, and the second is the general economic situation. It is worth reminding the House that, since the Bill was printed, the general


employment situation can only be said to have got worse. Even without tomorrow's figures, more than 130,000 of our fellow citizens have lost their jobs since then.
We all know that the official unemployment total to be announced tomorrow will either break or come very close to the 3 million barrier. No doubt the Secretary of State has the figures; perhaps she could let us have them. Perhaps seasonal adjustments will achieve the miracle of avoiding a breach of the 3 million barrier this time. If so, the next total will certainly be above 3 million. In reality, as has been pointed out, the number is already more than 4 million. There are indeed 4 million people in this country who need a job, but the Government are doing nothing to provide them with work. There are 27 people chasing every job. Indeed, there are 60 people for every vacancy in London.
In my adult lifetime the people of the west midlands made things for the rest of Britain. Indeed, articles manufactured in that area were sold right round the world. Half of the people who were in manufacturing industry in that great manufacturing area when Mrs. Thatcher became Prime Minister are no longer making things, and we are all suffering as a result.

Mr. Winnick: My hon. Friend has referred to the region that I have the honour to represent. Does he know that in pre-war days, as well as after the war, when there was nearly full employment, people came to the west midlands to find work? No one would do so now. One of the reasons for our balance of payments difficulties is that items that used to be made in the west midlands are now imported. Since 1979 many industrial concerns, including some of the largest, have gone out of business entirely. In my constituency, there are many people who never for one moment thought that they would be out of work, or that if so it would be for only a matter of weeks, but who have now been unemployed for years on end and may well never work again. That tragedy has been largely brought about by the wretched Conservative Government.

Mr. Dobson: I agree with every word that my hon. Friend says. No fewer than one fifth of all the manufacturing jobs that have disappeared have gone from the west midlands. As my hon. Friend has pointed out, even when—possibly if—we come out of the recession and people start buying more goods, many more of those goods will have to come from abroad as they are no longer made in the west midlands. Even if there is a resurgence of manufacturing industry, it will not alter the fact that a large proportion of manufacturers in the west midlands and in other areas now depend on foreigners to make their equipment. If we do not make the stuff ourselves, we have to buy it abroad; and if we buy abroad, we do not have a trade surplus; and if we have a trade deficit, we have difficulty in running our economy.
All these job losses have a direct effect on the low paid. They weaken their bargaining position. Unemployment also diminishes our economy and reduces the funds available to make Britain a decent place in which to live. The Secretary of State had to admit to the Select Committee on Employment that unemployment also hits every taxpayer in his pocket or her handbag. It costs the taxpayer £9,000, in benefit paid and in tax not taken in, to keep a person unemployed for a year. Thus the level of

unemployment that is likely to be announced tomorrow costs the taxpayer £27 billion a year—£1,225 per family. And it does not stop there. When people are not working, they are not producing. We used to hear from Conservative Members a great deal about the number of days lost through strikes. We never hear a word now about the number of production days lost through unemployment.
There are, as near as damn it, 3 million people out of work. That means that we lose 3 million days' production every day because of unemployment—and 3 million working days lost every day is 15 million working days lost every week. If the present level of unemployment lasts for a year, 780 million working days will be lost to the British economy-780 million working days with people not working and not producing the goods and services which contribute to the national wealth.
I estimate that the cost of that is more than £50 billion. If those people were at work they would produce goods and services worth at least £50 billion. Shared out equally —I know that in this country nothing ever is shared out equally, but for statistical purposes let us assume that, for once, that happens—the loss is £2,275 per family. If we add that to the loss to the taxpayer, we see that the Tory tax to pay for unemployment amounts to £3,500 for every family in the land.
That is the economics of the madhouse—and in the middle of the madhouse the Secretary of State turns up to abolish wages councils. Wages councils set the minimum wage for 2–6 million of the worst paid people in the country, 2 million of whom are women. We are not talking about princely sums; the highest minimum wage set is £3.10 an hour. But apparently rich Tory business bosses think that £3.10 an hour is too much. They have been writing letters to the Secretary of State saying, "You must get those wages down, otherwise I shall not be able to pay myself £584,000 a year." Business bosses say that they cannot compete if they pay those wages.

Mr. Graham Riddick: Will the hon. Gentleman give way?

Mr. Dobson: Not for the moment, but I shall later.
I want the Secretary of State to consider the hotel trade, which to some extent is an international trade. Why do London hotels have higher prices and lower wages than Paris hotels? If our hotel chains have to compete by bringing down wages, how can the French afford to pay their hotel staff more, yet charge guests lower prices? I suggest that somebody somewhere is pocketing the difference. It is not the taxpayer, or the guests in the hotels, and it is not the people working there; it is a lot of rich Tory business bosses who are trousering the money.
The Government's argument is that there should be no Government interference in the market. The idea is that every worker should strike a bargain with his or her employer. I return to the quotation from Churchill. I know that it upsets Conservative Members, and that they have heard it often, but what Winston Churchill said in 1909 when he introduced wages councils is good sound stuff. [HON. MEMBERS: "He was a Liberal."]—He was a Liberal but—[HON. MEMBERS: "Where are the Liberals?"]—I do not care where the Liberals are now.

Mr. Jacques Arnold: rose—

Mr. Dobson: No. I shall not give way for the moment. I shall give way later, if the hon. Gentleman can hold himself back for a minute.
I should mention that not only the Liberals and the Labour party but the Tory party, too, supported the measure in 1909. There was no Division on the introduction of wages councils. Everybody agreed with what young Winston said:
Where …you have a powerful organisation on both sides …you have healthy bargaining which increases the competitive power of industry and enforces a progressive standard of life. But where …you have no organisation, no parity of bargaining, the good employer is undercut by the bad and the bad employer is undercut by the worst".
I return to my original point—

Mr. Jacques Arnold: rose—

Mr. Dobson: No, I shall give way in a moment.
I return again to the question which we have posed to Tory Members. If this morning the Secretary of State had come with me to the place where my constituency borders with Westminster, she would have seen people sleeping in cardboard boxes.

The Minister of State, Department of Employment (Mr. Michael Forsyth): The hon. Gentleman has made that point before.

Mr. Dobson: I have made the point before, but it is valid today because they were in the cardboard boxes this morning, just as they were when I raised it before, but the hon. Gentleman has never answered the question. Let him answer the question. After sleeping in their cardboard boxes, those people who live in cardboard boxes go to the jobeentre for the hotel trade on the edge of my constituency. In London there are 60 people chasing every vacancy. What parity of bargaining have they with the giant hotel chains which have assets of thousands of millions of pounds? Where is the parity there?

Mr. Michael Forsyth: What the hon. Gentleman fails to tell the House, although he has made the point repeatedly, is how he would help the people who seek those low-paid jobs when hoteliers tell us that the wages council is preventing the jobs being created and being available. What service is the hon. Gentleman doing to those people if there are no jobs for them? Why does he think that what was appropriate for 1909 is appropriate for the 1990s?

Mr. Dobson: A truth remains a truth, whether it is an old truth or a new truth. It was a truth then and it is a truth today. If there is parity of bargaining, people stand a chance of getting a living wage. If there is not parity of bargaining, they have no chance of getting a living wage. It does not matter that that was said in 1909; it was true then and it is true today.

Mr. Forsyth: rose—

Mr. Dobson: If the hon. Gentleman is about to say that it is not true, he is even dafter than I thought.

Mr. Forsyth: If the hon. Gentleman is saying that people cannot get by because they do not have parity of bargaining with big employers, how does he account for the fact that, as wages councils cover only 10 per cent. of the labour force, the other 90 per cent. can get by without such protection?

Mr. Dobson: For a start, they do not get by in any reasonable sense. I make no apology for it, but the Labour party takes the view that if society was run properly and if the economy was run efficiently, everyone who wanted a job would have a job. If people had that job, they would be paid what their ambition is to be paid—enough money to pay their own way and to bring up their families without depending on benefits or handouts.
Under the Government one eighth of the work force are out of work and another eighth cannot afford to pay their way but have to go begging and scraping for benefits to make up lousy amounts to live on.

Mr. Riddick: In his intervention in the speech of my right hon. Friend the Secretary of State, the hon. Gentleman appeared to say that a future Labour Government—if there ever were such a thing—would not need to reintroduce wages councils because they would have a statutory national minimum wage. The OECD has said clearly that a national minimum wage in France has led to increased unemployment. Will the hon. Gentleman comment on that?

Mr. Dobson: My only answer is a further question. What has the OECD said about how the Government have managed to achieve the amazing unemployment levels which we have without a national minimum wage? There is no parity of bargaining. The idea that there is parity of bargaining for those who are badly off is not true. We have to have parity of bargaining so that people may have a reasonable chance.

Ms. Eagle: Does my hon. Friend agree that wages councils were set up in 1909 deliberately to deal with the dynamic effects of a free market in labour'? If pay is undercut, wages can carry on going down potentially to zero. In a free labour market the competitive effects of a systematic reduction hi wages lead to the impoverishment of large numbers of the work force. Surely everybody but the most fanatical followers of free market dogma accept the argument that there must be a minimum below which wages cannot fall so as to prevent bad employers undercutting better employers and impoverishing the work force.

Mr. Dobson: I entirely agree with the eminently sensible point made by my hon. Friend the Member for Wallasey (Ms. Eagle).
There is a further aspect to the abolition of the wages councils.

Mr. Jacques Arnold: The hon. Gentleman has just sneered at the British hotel trade, and he has said that it could not compete with, for example, the French hotel trade. When the hon. Gentleman was doing his homework, he might have asked our own British Hotel, Restaurants and Caterers Association what it thought. It says:
The current system imposes constraints on flexible remuneration packages.
That is precisely the point. The hon. Gentleman supports inflexibility which would not allow us to compete properly.

Mr. Dobson: As the wages councils set only minimum wages, the element of flexibility needed must be the flexibility to pay below the present minimum. There is nothing to stop most employers paying above the minimum. Most do and they always have, right from the first days of the wages councils.
Another problem that will arise from the abolition of the wages councils is the effect on women's pay. The Secretary of State for Employment has been given the duty within Government to promote equal opportunities. By backing the Bill, she is giving 2 million women the equal opportunity to be paid less than they are being paid now and the equal opportunity to see the gap between their pay and men's pay widen. The pay gap in wages councils industries is narrower than it is in other industries. That cannot be gainsaid unless the Government try to undermine their own statistics.
The abolition of the wages councils appears to be part of the Government's obsessive hatred of any form of employment protection. They cannot stand the idea of the social chapter. They do not like this form of protection for our people. At the beginning of the week, the Financial Times produced an analysis of employment protection across Europe. From careful reading, one can see that if the analysis was turned into a Eurovision song contest, a voice would say, after listening to the British entry, "Grande Bretagne, nul point." In other words, "Great Britain, no points." Our job protection laws are undoubtedly the worst in Europe.
The Conservatives say that the whole economy is endangered by people being paid as little as £2.59 an hour, which they claim costs jobs. That simply is not true. As we all know, employment has been declining sharply for the past three years. Nobody disagrees with that as a statement of fact. If the Government's arguments are correct, employment in the wages councils industries should have been in steeper decline than in other industries. Since 1989, the number of people in employment has fallen by 2 million. The number of people working in wages councils industries has risen by 90,000. Wages councils industries, with their minimum wages which are supposed to threaten jobs, are a group whose employment is expanding while there is a catastrophic decline in industries not covered by wages councils. That makes nonsense of every point that the Government have made but they are paying no attention because they are introducing the measure solely as a pay-off to the paymasters who paid their general election expenses in exchange for the abolition of the wages councils.

Mr. Jacques Arnold: Will the hon. Gentleman give way?

Mr. Dobson: No. I have given way enough already.
The next item may even affect the pay-off that has been received by a number of Tory Members. European law was introduced with
the object of guaranteeing the rights of employees
whose job was shifted from one employer to another. The British Government introduced some regulations that purported to establish that protection. Right from the start, however, they set out to exclude from that protection employees affected by privatisation and compulsory competitive tendering.
We discovered from some Treasury minutes that we laid hands on that, as early as 1983, Law Officers of the Crown—we heard about them and their famous European interpretations earlier in the week—had secretly advised:
the limitation in the Regulations to commercial undertakings was not a satisfactory implementation of the United Kingdom's Community obligations.

Now, we all know that the Law Officers' word is law and Parliament's is not-since Monday, at least—but, in this case, despite the view that the Law Officers held, the Department of the Environment and the Department of Health issued advice to local councils and health authorities saying that the Transfer of Undertakings (Protection of Employment) Regulations did not apply to them.
Then the European Commission caught the Government out. Certain cases heard in the European Court demonstrated that the regulations did, indeed, apply, which is why the Government are having to sort things out now. Their method has been to introduce provision in the Bill and try to pretend that nothing has changed.
Hon. Members who were not on the Committee will be familiar with the idea of a new opinion—a late wire from the course—from the Attorney-General. We had that on Maastricht on Monday. Members of the Committee were privileged enough to receive such treatment as early as January, when the Attorney-General came along, it was said, to clarify the law. To hon. Members who did not serve on the Committee but who were in the Chamber on Monday, his advice will have a familiar ring. Basically, he said, "We are introducing changes in this Bill but it does not really change the law as all these things were always intended to be covered: the rights are there and we have always intended people to enjoy them."
That was the Attorney-General's message, but it is simply not true: the rights of certain people were deliberately excluded and they are now having to be included. We welcome their inclusion and we expect the Government to compensate the people who were knowingly defrauded by Ministers of the Crown of the money to which they were entitled—when those Ministers had been secretly advised by Law Officers and when the British Government knew that they were breaking the law and were robbing a lot of badly-off people. We hope that the change will go through, even if it costs a number of Tory Members of Parliament some of the ill-gotten gains that they have made from having their hands in the compulsory competitive tendering process.

Sir Teddy Taylor: As this is obviously an important issue, as the arrangements could effectively kill off most privatisations, which some people think are good and others think are not so good, may I ask the hon. Gentleman whether he ascertained in Committee whether the Government appeared to have fought the infraction proceedings? Did they, for example, take any of the issues to the European Court? Or did they simply accept what the Commission asked them to do?

Mr. Dobson: The hon. Gentleman had better address his questions to those responsible for giving answers on such matters. To be fair to the Government, my impression was that they had fought a long hard rearguard action to retain their right to defraud British citizens in a way in which citizens of other countries were not being defrauded. But Ministers will no doubt answer for themselves.
The next matter to which I should like to refer briefly is the improved maternity provisions. To the extent that they are improvements, we welcome their inclusion in the Bill. Any improvement is welcome.
I should remind hon. Members of the genesis of the rules. They came to us courtesy of the European Community Fisheries Council because the British presidency was conducted so incompetently that no other Council of Ministers could get to a formal vote before the deadline so the Fisheries Council had to provide some maternity rules. It must be recorded that the Fisheries Council did not actually vote for the rules; we just accepted them.
The present maternity' provisions are confused and unsatisfactory. We believe that the provisions in the Bill are more satisfactory but considerably more confused. I am sure that the Minister will probably agree with me on that. The Labour party said—we made it clear that we would have facilitated this—that the whole arrangement should have been taken apart and put back together in an orderly and simple way for employers, the Department of Social Services and women and their partners to deal with. That would have been the best way. We regard this as a wasted opportunity to clarify important maternity rights in the United Kingdom.
It must be said that the Government intend to take one opportunity. They intend to privatise the schools career service. The Department of Employment sold the professional executive register to Mr. Robert Maxwell and that went bust. It also sold the skill centres to various other people and about half of them have now closed. Goodness knows, the country could do with a bit of skill. The Department of Employment disposed of the assets in that way and now intends to dispose of the schools career service which, until the Bill was introduced, was not its asset to dispose of at all.
Like every other institution in the world, the schools career service is imperfect. Until now, it has been run for the benefit of the children and young people who were being advised. The Government's alternative is to hand parts of the service to private companies, training and enterprise councils or Uncle Tom Cobbleigh. Will private companies put the interests of young people first in the same way as the schools career service has until now? Let us examine the service as though it were being run by a private company. Private companies will be interested in maximising their turnover. It is easy to envisage that, to maximise their turnover, they will enter into a cosy relationship with one or two local employers who might well be dodgy. Those companies would guide young people to work for those employers, rather than give them the career guidance to which they are entitled and which they had in the past.
I would say to anyone in the private sector, "If you think that you are any good at running a schools careers service, why not set up shop and do it? Why not try to compete, invite people in and say that you are offering a better service?" That is not how organisations that are supported by the Tories prosper these days. Companies which the Tories think are great grow by takeover: they do not grow by efficiency and expansion of their activities.
Some people have set their eyes on the careers service and decided that there are a few bob to be made there. They think that it would be a lot easier to do that job than the one which they do at present.
The priorities of the training and enterprise councils are not the same as those of the individual children and young people with which the careers service deals. It is possible that a training and enterprise council or a TEC bureaucrat who is given a quota to fill can see an easy way of shoving

a few kids who have not had much advice in that direction to fill his quota within the set time probably so that he will get some sort of productivity bonus if he deals with them quickly. We do not think that that is the right way to do it.
We are concerned—I know that the Government have agreed to re-examine the matter—that such privatisation may pose problems for handicapped young people and children with learning difficulties because they will not be a paying or profitable proposition for a private company and they will not be high in turnover from the point of view of the TEC bureaucrat who wants to get on with the job quickly and get his bonus.
We believe that there are dangers in the proposition. Under the Government's scheme, there is no guarantee that young people will continue to be the first priority for the service. That is typical of this Bill and the Government. We do not believe that the Government give top priority to ordinary people.
Everything has been sacrificed to market theories. When someone points out that the market theories do not appear to be working, the new ideologues blame something that they call externalities. What the ideologues call externalities turn out to be what the rest of us call the real world. When theory clashes with the real world, externalities are blamed. It is the real world which we are here to represent.
It is a real world in Britain where 4 million people are out of work. It is a real Britain where there are 57 million people in the country and only 4.3 million of them are making anything. In the real world, no less than a quarter of our population are either out of work or depend on benefits to make up their pay and get a decent income. In the real world, British people want work. They want jobs which will enable them to pay their own way, earn their keep and bring up their families. The Bill has not done a damned thing in getting any of them a job or decent pay at the end of it.

Mr. John Sykes: As a member of the Standing Committee that examined the Bill, I am delighted to have the chance to lend my support to the Third Reading. In doing so, I pay a tribute to my hon. Friends who spent many long hours during the winter debating the contents of the Bill. To quote my hon. Friend the Member for Derbyshire, West (Mr. McLoughlin), the Parliamentary Under-Secretary, we had an "interesting debate". It was a debate in which the vexatious litigant of the hon. Member for Strathkelvin and Bearsden (Mr. Galbraith) jockeyed for position alongside the golden thread of the Minister's arguments.
One of the most pleasurable aspects of the Committee is that at least I shall be able to tell my grandchildren, when they arrive, how, in the first autumn of my parliamentary career, I, along with several colleagues, was able to witness the old trade union machine rolled out of the knacker's yard. There they were every Tuesday and Thursday in Committee Room 9, some of the big guns of the trade union movement. They were short on ammunition, rather like the guns of Singapore—and anyway facing the wrong way. Not to mention the odd assortment of peashooters from the new intake in the Labour party, a wondrous thing, with so many of them, day after day after day, blatantly and, to their credit, proudly expounding the


philosophy of their ancient and discredited creed. But then we know, at least on this side of the House, that the little Clintons opposite, with that veneer of market economics will never change. We know that because they have told us so. Let met quote some lines:
Trade unions anchor themselves into the real lives of the ordinary people.
I suppose that that was true in the 1970s.
When the archaeologists are sifting around the debris of Walworth road in 20 years or perhaps 10 years—we hope —that is what they will find under a stone in the office of the hon. Member for Holborn and St. Pancras (Mr. Dobson). Those words are from the hon. Member for Holborn and St. Pancras, whose ideas are almost as old as that famous station in his constituency.
The Bill is the threshold towards the Prime Minister's avowed goal of making the United Kingdom a paradise for investment. I am fed up with trade unionists and Opposition Members constantly talking this country down, even in the face of proven success stories. Their silly arguments run along the lines that provisions such as the social chapter and regulations that the Bill seeks to remove help to increase productivity because everyone is happy. What nonsense! And when the opposite is proved to be the case—for example, the recent decisions of international companies to relocate in Great Britain—they whinge and moan about Great Britain being the Taiwan of Europe. I am a member of a family company which was established in 1845. The measures contained in the Bill are designed to give new freedoms to trade and industry which will lead to more jobs and greater prosperity.
I received a letter recently about the wages councils from a leading hotelier in my constituency. The company is family owned. He is not a rich Tory boss by any means. He is just an ordinary man trying to run an ordinary business on a day-to-day basis. He said:
At last the Government have seen fit to abolish the Wages Councils, a nonsense that had its part to play in history but no part now. This measure will give employers more flexibility and we will be better able to award staff according to their performance and productivity.
All payments should be between employer and employee to work out, bearing in mind local conditions, qualifications etc. etc. and are the better for being so—and I write as one who has never stooped to the minimum wage level with any employee!
With the abolition of Wages Councils we can get on with running our businesses with a little less paperwork and spend the time saved on seeking the customers whose patronage produces the employment, with the consequent effect on local economies of workers with good pay packets!
That is just one letter.
I now have to talk a little about Labour's proposals for a minimum wage. When I spoke to the jobcentre in Scarborough I was horrified to see that of the 75 jobs on offer, 50 were below the minimum wage that Labour would impose. Worst of all, in Whitby all the 42 vacancies were below that level. That means that each of those potential employers would have to decide whether to become less competitive by increasing their prices or to withdraw the job.
Labour must have a death wish for companies and people. Its minimum wage would either drive businesses to the wall or lose more people their jobs. Labour could not have invented a package which would do more damage to trade and industry. It is no good Labour telling us that

that would not happen when the vast majority of experts disagree. I find it unbelievable that, at a time when creating new jobs should be a priority, the Labour party proposes a policy which would lose more people their job. It would especially affect the most vulnerable in our society.
The Bill is part of the process that takes Great Britain towards the millennium. It is part of the process that my right hon. Friend the Prime Minister set in train when he torpedoed the social chapter a year last November. Jacques Delors acknowledged that by doing so my right hon. Friend had made Britain a paradise for inward investment.
Forget Labour's Europe. Labour's Britain is there for all to see in places such as Sheffield, Liverpool and Birmingham. As we head towards the 21st century, this is a Bill for more investment, more employment, more business, more output and more exports. It is a Bill for Great Britain. It is a Bill which is relevant to the 1990s and which consigns the alien practices such as we saw in Dundee, along with the Labour party, to the dustbin of history.

Mr. Jim Cunningham: I was interested in the comments of the hon. Member for Scarborough (Mr. Sykes), especially on the Prime Minister's paradise for investment. I do not see much investment when I look at the unemployment figures. The recession is becoming a nightmare for the unemployed and low paid. That is what the Bill is all about. As I have listened to the speeches of Opposition Members, I have wondered what is the relevance of the Bill to Britain's economic situation.
In areas such as the west midlands, one of the powerhouses of the British economy, unemployment is about 11–5 per cent. If that is paradise, I do not know what hell is. When one considers the unemployment figures one wonders about the relevance of the Bill to the erosion of our industrial base. Companies such as Leyland DAF are going to the wall without the Government doing anything about it. At the same time, great companies such as GPT and Rolls-Royce make systematic redundancies. One can only conclude that the Government have a phobia of trade unions and their relevance to society.
It is worth reminding the Government that in the 1930s in Germany trade unionists found themselves in prison or concentration camps for their defence of freedom. I do not accuse the Government of treating trade unionists in that way, but they should be careful about the way in which they treat trade unions.
Even if wages councils fix the wages of only 10 per cent. of workers, any modern society that cannot provide legislation to defend that 10 per cent. cannot be called a fair or democratic society. Between 900,000 and 1 million young unemployed people are living in despair. When they turn to officials in the Department of Social Security they are told that they can live on a cold meal. They cannot obtain a loan for items such as a cooker. A cold meal in the middle of winter? I wonder where we are going in this fair and democratic society when we treat people in that manner.
The Government have made no provision for one-parent families. Provisions should have been included in the Bill for creche facilities to enable mothers or fathers to pick up their careers again and seek employment. Yet


the Government provide subsidies through the social security system to employers who pay low wages. That is an indictment of the Bill.
Let us consider how far trade union rights have been eroded in Britain. Organisations such as Legal and Incomes Rights have to provide advice to trade unionists because an horrendous amount of legislation is increasingly complex. Certainly a democratic society must have a certain amount of legislation to provide a framework of law. But the Government should not create draconian laws to hinder individuals in freely negotiating to fix the wage that they want for selling their labour.
Yesterday and today I listened to Conservative Members talking about the abolition of the wages councils. They are going for a low-wage economy. Has it never occurred to them that some of our competitors are high-wage, high-investment, high-quality economies? Britain now compares with the third world and, in some respects, the former Soviet Union, where the importance of quality has deteriorated. If bodies such as wages councils are abolished, quality can be affected. It is affected if one is not prepared to have high investment and productivity, coupled with technological advance.
For the reasons that I have given, I oppose the Bill. I do not wish to be negative, but it is interesting that in major recessions the Tories always turn the clock back. When they quote Adam Smith they turn the clock back 100 years. When they repeal Churchill's legislation, they turn the clock back 80-odd years. That legislation stood the test of time. It has not affected the efficiency and welfare of the British economy. The Bill has taken people off' on a tangent into a debate which should never have taken place. The Bill should never have been introduced. A Bill should have been introduced to improve the British economy, improve people's living conditions and improve education.
I also oppose the Bill because it abolishes the Bridlington agreement. It is interesting that the Government seem to take their advice from smaller employers, not major employers of labour. Any experienced employer or trade unionist knows that abolishing the Bridlington agreement and introducing competition between trade unions is a recipe for chaos in industrial relations.
Most people would say that industrial relations is the relationships of human beings in an industrial environment—in this case, one that produces goods. At times, relationships will be under stress as human beings do and say things that they do not mean. With all due respect to the Government, the trade unions and employers, not the House of Commons, have to pick up the pieces.
To achieve our economic ends, we need less legislation. We must allow employers and employees to set rates of pay and productivity levels, through trade unions and organised labour. That is the way to improve our economic situation and that is why the abolition of the wages councils should have no part of any Bill laid before the House, as we should seek to protect the weak by strengthening such organisations.

5 pm

Mr. Patrick Nicholls: I must start by declaring my interest as a parliamentary consultant to MinOtels Great Britain Ltd.
I am sure that the hon. Member for Coventry, South-East (Mr. Cunningham) was right to concentrate on

the abolition of the wages councils, as that is clearly the issue that will preoccupy us on Third Reading. I say that because the measures in the Bill fall into two distinct categories. The first is the items ritually opposed by the Labour party, including the various trade union reforms; the abolition of the Bridlington agreement, to which the hon. Gentleman referred; the fact that a member of the public will be able to challenge unlawful industrial action; and improved safeguards for trade union members.
Labour Members oppose those measures today, but history has a way of repeating itself, and they will not do so next year. In three or four years' time, the Labour party will have the public believe that it was always in favour of them. That process contains an element of ritual. The Labour party is always in favour of any trade union reform that we passed three or four years ago, and that sums up its position on the Bill.
On Second Reading, in Standing Committee and today, we have heard about the Labour party's total opposition to the abolition of the wages councils. Anyone who speaks in favour of their abolition starts off on the defensive, because wages councils to protect the low paid sound such a good idea. If the Chamber was about the mere recital of good ideas, the wages councils must obviously be a good idea, because they sound like one. The trouble is that it is not like that. I shall refer to evidence that, while it is a good idea to try to protect people who are without work or who are in low-paid employment, wages councils are not the way to achieve that good end.
In justification, hon. Members ask, "How can you say that? The wages councils must be a good idea, because Winston Churchill was in favour of them."

Mr. Hanson: That is right.

Mr. Nicholls: We have just heard it again, and I must place that inane remark on the record. The hon. Gentleman said, "That is right."
Even in a packed House like this, I do not think that it will have escaped the attention of hon. Members that I am by nature a traditionalist. I am what is called a Conservative, and I take a great pride in my country's history. Very often, I look backwards for help when formulating policies. However, if I formulated legislation on social policy in the House on the basis that, if it was okay in 1909, it must be a good idea today, hon. Members on both sides of the Chamber would say that I was on this planet but not necessarily of it. The year 1909 is so long ago that even the hon. Member for Holborn and St. Pancras (Mr. Dobson) was probably not alive, although, as usual, he said that, as old Winston was in favour, it must be a good idea.

Ms. Eagle: Conservative Members are very ready to quote my hon. Friend the Member for Birkenhead (Mr. Field). Has the hon. Gentleman read the latest Durham lecture by my hon. Friend, which points out that income distribution is back to the same level as in 1886? So the Government have taken us even further back in history than 1909.

Mr. Nicholls: The hon. Lady obviously still has the mentality of saying that she believes in social democracy when she believes in a far more primitive version of socialism. If she thinks that the average family can pay their food bills by looking at the gap between the rich and poor, her attitude to life is bizarre. If the hon. Lady thinks


that the hon. Member for Birkenhead (Mr. Field) can usually be quoted on her side of the argument, I shall have to disabuse her in a moment.
Before we leave old Winston, let us remember that, although Labour Members quote him, they would not want to know if we asked them about Tonypandy or the Dardanelles campaign. The folk memory within them rises up if one asks them about Gallipoli. However, if one asks about that one pre-Sarajevo aspect of social policy, they will know about it and say that old Winston was a good person.
With all the insincerity at my command, I find that just about as convincing as a Conservative Member quoting Keir Hardie as being on his side, or Bruce Kent putting in a good word for Attila the Hun. It is complete nonsense. If the only support that can be found for the policy is that old Winston was in favour of it, I do not find it convincing.
There is a sort of mad corporatist logic in that argument, but if one takes it to the full extreme and believes that one can help the low paid and unemployed through a wages council structure, one should say that that structure should extend over the entire country. A wage would be laid down for every industry and process by a Minister or a bureaucrat in Whitehall. The Labour party is not in favour of that. Although it would be crackers, it would be logically so.
The Labour party is a great destroyer of wages councils— I accept that they are not all bad. If one casts one's mind back to when Labour was last in office, between 1974 and 1979, one remembers that it abolished wages councils at the rate of one every six months. Even the Opposition are prepared to question the validity of their existence.
The Opposition oppose the measure because they are looking at the wrong target. We constantly hear that low-paid employment is the worst evil that can befall anyone, but a condition called "no job" is worse than low pay. On Second Reading, in Committee and today, the Labour party has failed to explain how the wages councils contribute to people being in low-paid jobs.
Many people start their careers in low-paid jobs. If one has a time-warped, corporatist view of life, in which everything is a fixed entity and can never expand, and we can never make progress, people in low-paid jobs will be there for ever. That is a marvellous picture of history, which will appeal to people who have never read a book other than "The Ragged Trousered Philanthropists". That picture has no claim on reality. Many people start off in low-paid work and move on. It is a time in their lives.
Anyone who is unemployed knows that it is immensely harder to get a job if one is out of work, and that it is easier to make progress and move up the economic ladder if one has work.
If we tell employers that they will not be allowed to offer jobs, we will destroy work possibilities and the possibility of job creation. As we approach the 21st century, the idea could only be suggested by people who do not realise that employment happens when an employer has a service, or a product to be made, and it is worth his while to pay someone a rate to do it. That is the essential ingredient of a job and what it is all about. If a bureaucrat or Minister steps in to intercede on the judgment of the person offering a job, work is destroyed—it is as simple and straightforward as that.

Mr. Peter Thurnham: I have only just entered the Chamber and I did not have the opportunity to hear the earlier part of my hon. Friend's speech, but I think that he is speaking a great deal of sense. Does he agree that wages councils act as a sort of conspiracy between the employed and employers against the interests of the unemployed? If we want to find jobs for the unemployed, we shoud listen to them. I was on the Select Committee on Employment which considered the matter some years ago, and I am pleased that I then voted for the abolition of wages councils.

Mr. Nicholls: My hon. Friend is entirely right. There are industries and processes where the fixing of a minimum wage is something on which employers and unions actively work together, and there is an element of conspiracy.
The hon. Member for Holborn and St. Pancras said that he would not give a pledge to restore wages councils, because he was in favour of the national minimum wage. I like to find points of agreement in the House. I accept that the Opposition are as genuinely concerned about the fate of the unemployed and the low paid as Conservatives are. However, when I hear the national minimum wage proposed as a remedy for that condition, I begin to wonder how on earth the sincerity for one policy can match up to the commitment for a national minimum wage.
A policy for a national minimum wage is another way of stating the attitude that leads to support for wages councils. The extraordinary fact is that the thoughtful contributions from those on the left as well as the right of the argument who know what they are talking about show that not one of them supports the national minimum wage.
The Guardian stated:
Labour has a problem with the national minimum wage … it will cause extra unemployment … it will increase inflation".
A thoughtful Opposition Member, the hon. Member for Birkenhead (Mr. Field), said:
the employment consequences … would be little short of disastrous".
As for the trade unionists' view, Eric Hammond has said that the minimum wage would
create more unemployment and chaos and conflict on the shop floor".
Gavin Laird has said:
It's never worked in the past, there's no logic for it, it doesn't work in any other country and it certainly will not work in Great Britain".
If anyone feels that those comments from the left of the argument are too highbrow, I can give a lowbrow view from the hon. Member for Kingston upon Hull, East (Mr. Prescott)—[HON. MEMBERS: "Hear, hear."] I hope that Hansard will place on record the support being expressed for that hon. Gentleman. When asked to give the consequences of the national minimum wage, the hon. Gentleman said:
I knew the consequences were that there would be some shake-out—any silly fool knew that".
When the hon. Gentleman says "silly fool", we should take his word.
Outside the House, and sometimes even within it, those on the left of the argument know that the national minimum wage is not the panacea that they would like it to be. However, the Labour party's policy is to forget about the views of its trade union sponsors, the hon. Member for Birkenhead and the left-wing press. It ignores all that evidence and experience, and goes for the national minimum wage policy.

Mr. Sykes: Is my hon. Friend aware that even the right hon. and learned Member for Monklands, East (Mr. Smith), the Leader of Her Majesty's Opposition, concedes that the minimum wage would cause joblessness?

Mr. Nicholls: I am sure that he would concede that. It is curious that the policy still remains Labour party policy. Perhaps the right hon. and learned Member for Monklands, East (Mr. Smith) prefers to be in opposition, not government.
The saddest comment on the idea that people can be helped by a national minimum wage was stated many years ago by the late Vic Feather. He once said—I am sure with great sincerity—that he did not think that the Labour party should rest until everyone was earning above the national minimum wage. If one considers those comments, made in all sincerity, one realises that they represent the economics of the madhouse. Everything that underpins the argument is all about ensuring that, one day, everyone earns more than the national minimum wage.
If we are in the business of wanting to help those who are unemployed and those who earn low wages, we can do it in three ways. First, we can ensure that, when people are out of work, they are cared for and looked after properly. Secondly, we can ensure that there are training opportunities to help people get back into work when there is work. We cannot achieve it by opposing every training scheme that the Government have introduced since 1979. Finally, we should deliver an economic climate in which the employers who provide jobs are in a position to do so.
It is one thing to do as Opposition Members do, and say, "We care for the unemployed." I am sure they do, but the country is entitled to balance against that expression of good intent the adoption of policies that are the policies of the madhouse. That is why the Bill deserves its Third Reading.

Mr. David Hanson: During the past few months in Committee, I have been having a small bet with myself as to who would win the prize for being the most right-wing member of the Committee. At the outset, I thought that the Minister of State, the hon. Member for Stirling (Mr. Forsyth), might win it. The hon. Member for Scarborough (Mr. Sykes) made a late bid this afternoon, but the winner has to be the hon. Member for Teignbridge (Mr. Nicholls), who has never failed to surprise us in Committee with his right-wing comments.
I enjoyed discussing the Bill in Committee, which was a good learning experience for me—I have emerged wiser than before. However, my fundamental objections to the tenets of the Bill have remained, and even grown, during our deliberations. The Bill addresses all the wrong issues —a failing that was apparent from the first day of our deliberations.
Unemployment in the United Kingdom is rising. This is the 33rd month in a row that it has risen in my constituency in north Wales. However, the only proposal in the Bill to bring back employment to our community is to make the poorest people pay for the price of the high level of unemployment by reducing their pay. Low pay and poverty are increasing throughout the United Kingdom, and my region of Wales remains one of the poorest paid

districts. But the Government's only proposals are to reduce the employment conditions, pay and standard of living of one in 10 of the work force of my community.
Women, who need our support to stay in the employment market, and who, in the late 20th century, demand and need decent levels of maternity pay, are granted only the basic minimum in the Bill. The Government opposed even that level during our discussions in Committee. Privatisation, which has been a fetish of the Government ever since they were first elected in 1979, is now to be extended to the careers service, which the Government do not own or control and which they have no right to hand over to the private sector.
The Government's proposals in the Bill remain objectionable. It is not a Trade Union Reform and Employment Rights Bill but a Trade Union and Removal of Rights Bill. That comes as a surprise to me, because, in Committee, we were told that the Conservative party was the party of the individual, and of the promotion of the individual. The Bill flies in the face of that aspiration. It shifts power away from individuals who live, work and spend their lives in communities, and transfers it to bigger forces over which people have no control.
What rights in their daily lives will individuals in my constituency have if they have no individual choice over matters controlled by larger forces? What rights to negotiate pay and conditions will a low-paid worker in a wages council industry have in a non-unionised environment? How have we stengthened those employees' rights by removing the basic minimum wage? We have not strengthened individuals' rights, but diminished them. The Government will pander to the forces of strength against the forces of those who are weaker. They have shifted the balance of power.
What rights will women have when they are pregnant, and seek support and decent maternity rights? Women in other European countries will consistently have greater rights. Under the Bill's provisions, to what degree will women be able to extend their rights when an employer does not wish them to do so? Once again, individuals are being challenged by forces bigger than themselves. What rights do people have to organise freely and fairly in trade unions so as to counterbalance these powers and develop their freedom?
The proposals in this Bill are all squalid; they will lead to a diminution of rights, not an extension. The abolition of the wages councils, the imposition of basic maternity pay, by contrast with what happens in the countries of our European partners, and the privatisation of the careers service are all retrograde steps. They have nothing to do with quality, fairness or justice and everything to do with the power of big business, of privilege and of capital—all at the expense of the public good. We should not forget that when we vote this evening.
Yesterday, we spoke at length about the wages councils and maternity rights, and I do not propose to cover them in detail today, but I should like to ask some questions about the proposals to privatise the careers service. In Committee, the Government failed to answer many of our questions about the effects of these proposals. I hope that the Minister will respond to them today. Why are we trying to change the careers service operation? The Government do not own or control these services in any case; they are run by local government. What has been wrong with their operation? Have queues of employers been knocking on the Secretary of State's door claiming


that they have been failed by the careers service? Have millions of parents done that? Neither I nor my hon. Friends have had any correspondence to that effect.
Is the careers service failing our young people? No; I see no need for change—

Mr. Beggs: Does the hon. Gentleman agree that it is easy to attack our well established careers services at this time? They are run by professionally committed people with a great deal of experience, but the advice and guidance that they have given young people cannot be put into practice because—this is the real failure—there have simply been no career opportunities for most. Most employers would confirm that most of the posts that they have to offer are in any case filled by people who are over-qualified for them.

Mr. Hanson: That is a valid point, and I intend to return to it towards the end of my speech.
Who will provide the new services? What will the quality threshold be? We have as yet heard no definitive answers.
In this age of subsidiarity, I would welcome the Government telling us why the Secretary of State for Employment believes that she can provide a better service for my constituents in north Wales–250 miles from her office in Whitehall. At the moment, those services are provided two miles down the road at shire hall in Mold, by local people who are accountable to local councillors. What objectivity or impartiality will there be in the new services? It may well turn out to be a profit-oriented service, bidding for niches in the market that bring in the best returns for an investment.
In short, the proposals on careers services are not about improving them or making them more accountable, or about meeting the needs of young people and others who use them: they are about continuing to implement the Government's dogma of privatisation.
What representations have the Government received about these changes—or for the maintenance of the status quo? If the Secretary of State and the Minister give us the factual details of the responses that they have had, I believe we will discover that they have had more representations in favour of maintaining the status quo than in favour of changing it.
What assessment have the Government made of careers services nationally? I suspect none. They have not even bothered to assess the success or failures of the services, and that is beyond me.
The careers service provides a free, fair, impartial local and accountable service. Long may it continue to do so. Under the new arrangements, however, what accountability will there be? In Committee, the hon. Member for Derbyshire, West (Mr. McLoughlin) said in answer to one of my questions.
Anyone who wishes to complain about the service will have the same recourse to their Member of Parliament, who will be able directly to ask questions of the Secretary of State."—[Official Report, Standing Committee F, 2 February 1993; c. 706.]
Does that represent an improvement in accountability?
At present, if I do not like my service, I can walk three streets from where I live and knock on the door of the local councillor. I do not have to write to London or take part in a delegation. I could also drive or cycle—or walk—two

miles to shire hall and complain there. This accountability will be lost under these proposals. In an age of subsidiarity, the Government are removing local accountability, not enhancing it.
There are no assurances of quality thresholds or of improved services. The service will fragment and come under central control, and it will become profit oriented. All these ideas should be rejected.
The provisions in this Bill are horrendous. The abolition of the wages councils and the privatisation of the careers services, not to mention the parsimonious attitude to maternity rights—these ideas too should all be rejected. I look forward to coming to the House on some future occasion and voting for a minimum wage to raise basic salaries for the poorest people in society. I look forward to voting for improvements in maternity leave and to increasing it to a minimum of 18 weeks. I look forward to improving antenatal standards of care and introducing paternity care so as to recognise that women alone are not responsible for bringing up families.
I want to come here and vote for fairness for the unions and for fairness as between workers and those who employ them. I want to vote for improvements in the careers service that build on what is good but do not destroy, just for the sake of dogma, what does not need changing.
We need a programme to rebuild Britain, to create jobs, to build services and to improve the lot of everyone in society. Every Government proposal this evening will magnify injustice and bear down on the poorest. That is why I will be proud to vote with the Opposition against this Bill.

Mr. Michael Bates: I am grateful for the opportunity to speak in this important debate. I should have been a great deal more sympathetic to the Labour party had it not indulged in one of the greatest ever endeavours to abolish wages councils. The Labour party abolished 10 of them between 1974 and 1979. Those councils covered about 600,000 people. It is therefore a little rich of Opposition Members to speak as they have done in this debate.
Opposition Members fail to recognise the importance of the measures that we are adopting to remove wages councils, which are wholly out of date in the present labour market. It is interesting to note the names of some of the wages councils that are to be abolished, and their relevance to today. One of them is the coffin furniture and cerement-making council, covering about 200 employees. Then there is the cotton waste reclamation council, covering 300 people. The list gets better. The next is the ostrich and fancy feather and artificial flower wages council, covering about 500 employees. Of course, the Labour party may argue that these councils are absolutely necessary to tackle unemployment in 1993. Perhaps the Opposition will explain the relevance also of the perambulator and invalid carriage wages council, which covers 2,000 employees. Clearly, such councils are out of date—Labour recognised that, but for very different reasons.

Mr. Peter Bottomley: My hon. Friend listed a number of wages councils, but while it is commonly accepted that about 2 million or 3 million employees are covered by them, he accounted for only around 3,000. Can he say what is to happen to the other 2 million employees?

Mr. Bates: I should be happy to list all the wages councils, if time permitted. The point remains that eight out of 10 employees are not covered by them. If wages councils are such a good idea, as the hon. Member for Wallasey (Ms. Eagle) suggested, and if the argument is one of accountability, as was said by the hon. Member for Delyn (Mr. Hanson)—of popping round to a local county councillor—why are Labour not proposing to cover the entire working population with them?
Labour abolished many wages councils because of the cosy link that existed between that party and the unions. Labour came under pressure from the unions, which said, "Wages councils are doing us out of a job. Employees are seeing wages councils negotiating their pay and conditions when that should be done by trade unions."
I like to think that the trade union reform legislation that Conservative Governments introduced in 1979, 1980, 1982 and 1986 brought about a trade union movement that—apart from the calls sometimes made by Labour—takes a responsible approach to inward investment. It is a great pleasure to see that constructive attitude taken at a time when we are trying to attract investment to the United Kingdom, to create real jobs.
The issue of concern to the 5,789 people in my constituency who are out of work is not low pay but no pay. A survey by the local Employment Service office into attitudes and characteristics of unemployed people in Cleveland county involved asking people the minimum wage that they would require to go to work. Some 62 per cent. of those living in Cleveland required a minimum weekly wage of £91. We are not talking about choice—wages councils would prevent those people from seeking employment when they are quite prepared to do so. That is an amazing infringement of a civil liberty and a basic right—to be able to go to work and to ply one's trade for an acceptable income. Who are we to legislate against people getting work and providing an income for their families?
Much was made of the situation in 1909—this debate seems to be going back further and further in time. In 1909, today's extensive social welfare and social security system did not exist. A Conservative Government introduced family credit and income support—both sensible reforms which targeted help at those on low salaries, while allowing them to enjoy the dignity of continuing in employment.

Mr. Alex Carlile: Will the hon. Gentleman give way?

Mr. Bates: The survey showed that 80 per cent. of the work covered by wages councils produces a second income. The benefits system takes account of a households's total income, responsibilities, and levels of expenditure, and then provides a sensible, means-tested top up to the individual's salary. That is a much more beneficial method of protecting the low paid in our society.
Another survey showed that 70 per cent. of foreign-owned companies in the United Kingdom acknowledge the improvement in its industrial relations over the past 13 or 14 years. That is a tremendous achievement. The number of days lost through strikes fell from 3.2 million in January 1979 to 500,000 for the whole year to August 1992. That point may be lost on the Labour party, but it is not lost on the hundreds of businesses in America and Japan who are flooding into the United

Kingdom to invest. Inward investment to the north-east amounted to £2.7 billion, creating or establishing 35,000 jobs.
The United Kingdom's industrial relations record has transformed it from being the sick man of Europe to the country that attracts 60 per cent. of all foreign investment made by America and Japan. I am delighted that the vast proportion of it comes to the north-east.

Ms. Eagle: Will the hon. Gentleman give way?

Mr. Bates: Never mind harking back to 1909 and to wages councils, because they are hugely removed from present events. Today, I took leaders of the oil and gas industry in Teesside to meet my hon. Friend the Minister for Energy, who kindly received us and listened to the points that were made. We were able to tell him about the great plans for investment that those leaders have for Teesside and of the thousands of jobs that they intend to create. That was music to my ears at a time of high employment—real jobs coming to my constituency. [HON. MEMBERS: "Oh."] As the Member of Parliament who represents Langbaurgh, I am right to focus attention on those new jobs.

Ms. Eagle: Will the hon. Gentleman give way now?

Mr. Bates: Those companies are coming to this country because they see it as the place in Europe to locate because of its industrial relations and the skilled work force that it can offer.

Mr. John Spellar: Will the hon. Gentleman give way?

Mr. Bates: No, I will not.
Those jobs are vital to my constituency and we would do well to focus our attention on freeing the market, creating responsible trade unions and creating employment opportunities for people who are out of work—rather than making outdated arguments from the past.

Ms. Angela Eagle: Thank you for calling me, Mr. Deputy Speaker—especially at this moment, to follow the contribution of the hon. Member for Langbaurgh (Mr. Bates). He is the first hon. Member I have encountered who fails even to acknowledge a request to give way, but instead ploughs on as if nothing is happening. His grasp of reality is about as advanced as his manners.
It would have been more honest of the Government riot to have called this the Trade Union Reform and Employment Rights Bill, which is a perverse description of it. I have a couple of suggestions for alternative titles. It could, for instance, be called the Labour Market (Deregulation) Bill—or, perhaps, the Trade Union Bashing and Removal of Employment Rights Bill. [Interruption.] The reaction of Conservative Members is very revealing: it shows their real motives.

Mr. Sykes: Perhaps the hon. Lady would have liked to be in the position in which I found myself during the "winter of discontent". A grown man was sobbing in my office: his wife and family had received death threats because he had crossed a secondary picket line to deliver


oil to a hospital. It is because our Government have outlawed such alien practices that they have been returned to power four times in succession.

Ms. Eagle: I can only reply that, after 14 years of this Government, there is a good deal of fear and insecurity in the country. That is due to poverty, unemployment, homelessness and the many other social effects of the Government's appalling economic policy, and their ideological obsession with deregulating the labour market.
When we examine what has happened over the past 14 years, we begin to perceive the general ideological thrust of the Government's policy and to realise that the Bill is a further example of that. It will redouble the effects that we have already seen. The Government's policy is, as I have said, to deregulate the labour market: the reaction of Conservative Members when I suggested alternative titles for the Bill suggests that they agree with me.
By definition, people at work—both unions and individuals—are bound to have less power over their employers and less power to protect themselves against arbitrary treatment of any kind. Over the past 14 years, the labour market has been deregulated pretty viciously, in several ways. First, employment protection legislation has been systematically dismantled: that has been a central theme of the Government's labour market policy since they came to office in 1979. We have seen, for example, the lengthening of time limits applying to full-time and part-time workers' access to protection against unfair dismissal; the abolition of various rights to arbitration; the cutting of benefits; and the breaking of links between earnings and benefits, especially in regard to those who are rendered unemployed. All that helps to make the prospect of unemployment more devastating now than it was before the Government came to power.
The weakening of trade unions has been perhaps the most explicit aim of the series of Conservative Governments who have been in power since 1979. When we examine their record and analyse the rhetoric that they have used in boasting about the devastation that they have caused, we find that all that the Conservatives can really boast about is the so-called weakening and taming of the unions. They seem proudest of that. Certainly they cannot be proud of the current level of unemployment, or our success in the world: we now face massive public sector borrowing requirement debt and a vast balance of payments deficit owing to their inefficiency and incompetence. They have been successful in no other area of economic life, but they have succeeded according to their values.
The Conservatives have produced six pieces of legislation designed to remove workers' protection by weakening the unions. The Bill is just another step down the road towards the achievement of their aim—to make trade unions as ineffectual as possible. If we strip away the rhetoric about individual trade union rights, we find that it is all about power in the workplace. The Government have reduced the unions' power in the workplace and that, in turn, has reduced their ability to look after the interests of individual members.
The Government have ensured that the everyday lot of working people is not just insecurity and fear of unemployment—unemployment, of course, is now massive—but the experience of a much more arbitrary and

dictatorial style in the workplace. I have always called it macho management. Many more people now suffer from such authoritarian behaviour as a result of the Government's policies, but the Government seem pleased with their achievement.
Another factor that has helped to deregulate the labour market is the unprecedentedly high unemployment levels that we have suffered over the past 14 years. As we heard earlier, the official figure is now 3 million, but we know that the way in which the figures are calculated has been changed 27 times. By fixing the figures, the Government have lost 1 million unemployed: that has been their most effective job creation scheme. I wish that they would show the ingenuity that they appear to have displayed in the manipulation of official statistics by securing real jobs and prosperity for our people.
It all boils down to the Government's ideological obsessions. We returned to that time and again in Committee. The Government believe that market forces should be allowed a free rein, whatever the consequences. Opposition Members have been keen to point out the devastating social effects of a completely unregulated market—a labour market, or any other economic market —on the social fabric of the nation. The result of the Government's worship of the god of market forces has been 4 million unemployed.
My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) drew attention to the economic madness of that policy in his excellent speech. He pointed out that carrying the present unemployment level wastes £27 billion—money which could be put to a more productive use. As the Secretary of State admitted, that amounts to £9,000 per person. Moreover, lost production is costing us £50 billion. Given such a level of loss and incompetence, it is hard to imagine that Britain's problems revolve around the flexibility between a rate of £3·10 an hour—the current highest level of wages council remuneration—and zero.
We should remember that £3·10 an hour works out at £120 a week gross, which is hardly a startling sum. Conservative Members, however, are asking us to believe that, if only that flexibility existed, all our problems would be solved and massive employment would be created. They must know that that is nonsense. I do not know how they can say such things with a straight face: I commend them for being able to do so, time and again, without placing their tongues firmly in their cheeks.
Unemployment is especially devastating in the north-west. We are seeing the same pattern—mass unemployment, at a higher level than we experienced since the 1930s. Two aspects in particular give cause for concern: the number of long-term unemployed—more than 1 million—and the number of young unemployed. We have failed a whole generation of young people by our neglect.

Mr. Oliver Heald: In France, Spain, Greece and most other European countries that have introduced minimum-wage legislation for young people, youth unemployment is far higher than it is here. Would the hon. Lady care to comment on that? She keeps saying that the Government in this country are failing people. Have not those other Governments failed people by introducing minimum-wage legislation that has destroyed jobs?

Ms. Eagle: The hon. Gentleman should stop barking up the wrong tree. He should consider youth unemployment in Germany, which is known for its high-tech industries and high-quality employment, and see whether that supports his argument.
In May 1979, unemployment in the north-west was 5.1 per cent., but in December 1992, after 14 years of "success" under this Government, it was 10.9 per cent. The Government, uniquely among western Governments, have managed to manufacture two recessions. We are in a world recession and, although Britain went into recession before the rest of the world, it seems that it will come out of it later. The hon. Member for Hertfordshire, North (Mr. Heald) failed to recognise that we had our own recession between 1980 and 1982 thanks to the Government's monetarist obsessions, which destroyed one third of manufacturing industry.
I want to spend a little time considering the poverty that has resulted from deregulation of the labour market, which was part of the strategy that the Government decided to pursue on taking office. Under this Government, we have seen the largest redistribution of wealth to the rich. That was achieved partly through tax cuts, on which I do not want to spend a lot of time because they are not relevant to the Bill, but plummeting rates of pay have been caused directly by deregulation. The Bill further deregulates and impoverishes and will, therefore, increase poverty.
Part III of the Bill sits uneasily with the Tory party's labour market philosophies. Part III would appear strange to someone who was unaware of its background, because, however grudgingly, it grants some employment rights of a limited and technical nature. Somebody reading the Bill without background knowledge could be forgiven for wondering what is the purpose of part III, given the ideological obsessions of Tory Members.
The Secretary of State tried to take credit for all the rights in part III, but they result either from the Government failing properly to apply previous EC directives or from new directives that they fought tooth and nail, weakened, held up and introduced grudgingly at the last possible moment.
The Library research note on the Bill confirms my view. It says that improvements in the statutory protection in part III are
almost entirely inspired by EC directives.
Would not it be nice to have a Government who had the wit, generosity and commitment to introduce employment protection instead of deregulating, impoverishing and endangering the work force?
Another aspect of the Bill that worries me is that it will widen the equality gap—the gap in employment rights between men and women—and the pay gap.

Mr. Michael Forsyth: I apologise for interrupting the hon. Lady, but I cannot let her get away with that remark, which implied that provisions in respect of women who become pregnant while at work follow solely from, and are driven by, the directive. The amendments that were made last night go beyond the terms of the directive. Will she confirm that the rights included in the Bill go beyond matters covered by European directives, and would she like to withdraw the rather scurrilous allegation that she made?

Ms. Eagle: I thank the Minister for his intervention, but I do not agree with his analysis. Some of the amendments

were proposed by Labour Members to make something awful slightly better, which is why we consider Bills line by line in Committee. If the Government had been truly committed to introducing meaningful rights for women at work—maternity and various other rights—they would have considered the ramshackle and piecemeal structure of equality law much more enthusiastically. They would not have introduced a third tier of employment rights in the most technical and most difficult way to implement. I would be much more willing to believe the Minister's commitment to creating meaningful maternity rights for women if the Government had been willing to consolidate women's employment rights in one simple and easy-to-use Act so that employers and employees were aware of their rights. I am not willing to withdraw my observations. The Government have been dragged kicking and screaming by EC regulations into granting minimum employment rights.
The Bill runs the risk of widening the pay gap between men and women, and the Equal Opportunities Commission shares my view. One of the mechanisms that will widen the pay gap, which is against the beliefs of those who favour equal pay for work of equal value and the equality legislation that has been on the statute book for 20 years, is the abolition of wages councils. Analysis shows that the pay gap between men and women in wages council industries is considerably narrower than in unregulated sectors. I suggest that that is so because wages council rates are unisex and apply equally to men, women, workers from ethnic minorities and people with disabilities. People do not suffer from discrimination because of their gender, colour or disability.
Yet another deplorable aspect of the Bill is that it widens that gap. It is a sad day for hon. Members who are committed to achieving equality at work to have to stand by and watch that happen.
The Bill is another rehash of the Government's tired dogma. It does nothing to deal with Britain's economic situation, which is at crisis level with massive poverty and unemployment and no prospect that anyone can see of getting out of recession. It does nothing to equip a modern work force to face the 20th century, but instead looks back to the 19th century. Therefore, it should be opposed.

Sir Teddy Taylor: I usually try to avoid debates on trade union reform or labour relations, because they have a bad effect on my blood pressure. I do not like to hear Tory Members—a small minority—hurling abuse and contempt at trade unions, because when I worked on Clydeside I found more integrity and good will among trade unionists than in certain sections of the Conservative party.
It worries me hugely to hear Labour Members expressing great concern about poor people, because they voted huge extra sums of money to agriculture, which is the biggest protection racket that has ever existed and which does massive damage to poor people in Britain, as they well know.
I want to say a few words about clause 26, which has rarely been mentioned in our debate and is rarely mentioned at all. It gives the impression that there has been a conspiracy of silence about a massive change in British law which will effectively undermine the issue of privatisation.
The Government's practice with regard to EC measures has been to say, "This doesn't really matter at all. It is hardly a change. In fact, the Law Officers have told us that everything is going very well." However, this morning I received a letter, which I shall be glad to give to the Minister, from the managing director of the Clause 26 group. It stated:
Companies are facing financial ruin as a direct consequence of the confusion brought about by the inclusion of clause 26 in the Trade Union Reform and Employment Rights Bill.
He may be exaggerating, but members of the Committee are well aware that something serious has happened, which will have a significant effect on our economy.
Let us consider what is involved in privatisation. Refuse collection and street cleaning contracts had a value of about £448 million, the cost of ground maintenance was about £141 million and for building cleaning about £191 million. I have gained the impression—

Mr. Michael Forsyth: I know about the concern expressed by the Clause 26 group. I have spoken to the group, as it lobbied the Committee. There is nothing in clause 26 that changes the terms of the acquired rights directive. The concern expressed to him relates to the provisions of that directive. My hon. Friend's knowledge of Community institutions is second to none, and he will know that there is nothing that we can do in the Bill to change the terms of that directive.

Sir Teddy Taylor: I note that the Minister says that the directive has not changed, but, as someone who has studied these issues, I hope that he is aware that we are changing the law. I hope that he is aware that the House passed a law after the EC had issued the directive. After that, infraction proceedings were taken against us for three years. As far as I am aware, that was not made known to the House or to the industries directly involved.
The Commission said, "Please change your interpretation of five aspects of our directive, which is a splendid directive." The Government apparently accepted four changes. I am sure that they accepted a battle of correspondence but not a real battle. They did not go to court over one single aspect. Is that not the case?

Mr. Forsyth: Four of the points were taken on board, and one is still subject to dispute. I reinforce my point: it is the terms of the directive which matter. If the Government did not comply with infraction proceedings and if we did not change the law, it would still be open to people to look to the courts to enforce the terms of the directive. That is the key issue which my hon. Friend needs to take on board.
I agree that we need to consider the terms of the acquired rights directive and that, in line with the principle of subsidiarity, it is a matter which can best be determined by national Governments, but because the pass was sold by the Labour Government as far back as 1977, we are not in a position to do so.

Sir Teddy Taylor: The Minister talks about legal points and what happens if we do not conform to infraction proceedings. That is the most astonishing interpretation of European law that I have ever heard. Infraction proceedings result in our being written a letter. If the Commission says that we are not applying the directive

properly, it will take infraction proceedings, which means sending us a letter, and we must send one back. If we feel that it is a battle worth fighting and something about which we feel sufficiently strongly, we can go to the courts.
The Government accepted four proposals. The Minister says that it is a matter of interpretation of the law, but it is a significant interpretation. It is disappointing that, when a significant change is made to United Kingdom law or, as the Minister would say, our interpretation of the European directive, no one wants to talk about it or to consider the implications.
I feel strongly about this, because Southend-on-Sea started the business of municipal privatisation. Some people may not agree, but we believe that we were the first. We made a big change in our cleansing department by saying that we would get rid of a lot of people. We decided to start again and do it differently. We were attacked for many reasons: people said that we were trying to cut costs and slash wages, but now wages are higher and we have an efficient service which has saved a great deal of money. It has now happened all over the country, as the Minister is aware. Conservatives usually think that privatisation is a good thing. A huge amount of money has been saved across the country—the estimate is about 20 per cent.—by saying that we want to try all these exciting things.
I submit that, under the new interpretation which the Government accepted following infraction proceedings, privatisation will be severely undermined. The Minister might doubt that, but I shall cite an example. Privatisation is about to take place on the Fenchurch Street line, which goes to Southend-on-Sea. I wrote to my hon. Friend the Minister for Public Transport, who usually tells me the truth, because, as the Minister knows, he is a decent guy. He does not talk about such things as the social chapter or unusual interpretations; nor does he talk a load of rubbish on television like other Ministers. I asked him what would happen. He wrote:
we understand that under TUPE all staff employed wholly or mainly on the passenger service operations of the LT&S at the time will transfer when a franchise is let for those operations. Their wage rates and other employment terms and conditions will be maintained, and the recognised trade unions will have to be consulted"—
meaningfully. As Members of the Opposition Front Bench are aware, if we do not have meaningful consultation—the word "meaningful" must also be interpreted by one of the bright tribunals—the employer will be fined the equivalent of two weeks' wages. Basically, that is a huge change, which has had dramatic consequences.
A firm called Thamesway, one of our great new privatised bus companies, said that it wanted to be involved in the Fenchurch Street privatisation. It believed that it was a great idea and wanted to run the train more efficiently in a new spirit of private enterprise. The company knew that it might have turned out to be a disaster or a great success like our cleansing operation. What happened? When the Bill was published, Thamesway said that it was no longer interested.
Hon. Members will remember the great prison privatisation that was to take place. A firm called McAlpine was going to do exciting things so that people would jump up and down far more efficiently at less cost, prisoners would be happier and would get coffee in bed in the morning. I do not know how the firm was going to do it, but it proposed to do it more cheaply and better. However, I understand that the firm has now abandoned the idea.
The Minister may say that it is all a question of how we interpret the law, but the plain fact is that a massive change has occurred. The evidence is there. Time will tell if I am wrong. The Minister might believe that firms are going to rush to become involved in privatisations. If they do, he can say, "Taylor is a clown", but the change is big, and it is happening.
I do not object to the fact that the EC acted when there was a Labour Government. What worries me is that we are not being told about a massive transfer of decision-making —the facts are being deliberately hidden. Is that merely Taylor's view? Far from it.
The Clause 26 group consists of employers, the people who want to become involved in privatisations and have spent a fortune trying to get them off the ground. The group is saying that, if it had been told about infraction proceedings, it could have saved a great deal of money and time:
If contractors had been aware that Brussels was seeking to enforce the Acquired Rights Directive on public service contracts, they would have viewed the new market opportunity in an entirely different light.
If the Minister wants the letter, he can have it. This is not me telling stories; it is what the Clause 26 group said. It said that, if it had known about this, it would have approached the matter in an entirely different way.
Then there is the famous social chapter, about which we have been given all kinds of nonsense. Ministers told us that it would cost British firms millions of pounds, but now the Foreign Secretary tells us that it will not apply to Britain at all.
It is time for the Government to face up to the fact that these things are happening. People should be told what is going on. Things ought not to be hidden. We could, as usual, blame problems on the Labour party and the trade unions by saying that they were in power when the original directive went through. However, mighty things are happening, and it is very important that we should face up to that fact.

Mr. Robert Ainsworth: The hon. Gentleman probably does not know that, throughout the Committee stage, Conservative Members referred to concern about creeping competence, about matters in respect of which the European Community was slowly eroding the rights of the British Parliament. Surely it must seem strange to ordinary working people that some Conservative Members should be so animated by the question of the right to continue to exploit working people. We have before us a Bill that removes workers' rights in a most profound way, yet the hon. Gentleman and some of his hon. Friends seem to be concerned only by the fact that Europe is taking more powers from this Parliament.

Sir Teddy Taylor: If people agree with the hon. Gentleman, if they think that Tories are a bunch of scum doing everyone down, they can change the Government, and therefore the policies. What worries me about EC directives is that people can do nothing about them. The hon. Gentleman may agree with those people who say that privatisation is wrong, and bad for working folk. I happen to think that it is good for workers—by, for example, keeping costs down. If private enterprise were to sweep through agriculture, for instance, the living standards of working people in Britain would be infinitely higher. It is a question of different approaches. The hon. Gentleman

May be right, and I wrong. If he can persuade the people of Britain that laws of the type of which he is in favour should be brought in, that will be fantastic. Sadly, however, rights are being taken away.
The really bad thing is what would happen in privatisation generally. All workers would have to be kept on, wage rates maintained, and working conditions protected, and there would have to be meaningful consultations with the unions. Having said that, I want to put three simple questions to the Government.
First, do they regard this as a serious matter? That is a simple question, requiring the answer yes or no. The Government may say that nothing has changed, that what we are faced with is simply the interpretation of a directive, but there is a huge difference of interpretation. I am referring not to what we have heard from the Law Officers but to the desire of the Commissioners to take proceedings, to which we have been told we must agree. I happen to think that that is a very serious matter.
Secondly, have there been any signs that industry and commerce are giving up their interest in privatisation? Recently, I have given two very specific examples, and there are many more—a huge number, the Clause 26 group says. Are the Government aware of any such cases?
Thirdly, what is the reason for the row about one of the five measures that the Government are not conceding to the EC—a measure in respect of which we may go to court? I refer to the granting of recognition to trade unions or other employee representatives for the purposes of these meaningful negotiations. I can assure the Minister that I have a real problem in Southend-on-Sea—a railway line that is to be privatised. I do not know what to tell workers, friends and neighbours. Until now, I have urged people to rejoin trade unions fast, on the grounds that they need representation in the meaningful consultations. This is a matter of great importance and real significance.
People in the Department of Employment work very hard and late to do the best for the working people of Britain. Let them concentrate on telling people what is happening. We know that there has been a mighty change in the interpretation of the directive. There is no point in saying that nothing much has happened. Let people be told what has happened; then a decision on what to do about it can be made. Some people say that we cannot go on like this, that change is necessary. Others say that private legislation should be tried. What is happening in this case has happened in many others. A major change is being made in the rights and liberties of the people of Britain.
We should be able to go for privatisation if we think that it is a good thing. However, people are not being told what is happening. Things are being swept under the carpet. There is pretence that the law is unchanged or that there are only a few minor changes. People in Britain should be told to wake up. Firms should not be deprived of information. We must realise that something nasty and serious has happened—and, sadly, it is something over which we have no control.

Mr. Alex Carlile: I should like to begin by apologising for my absence at the beginning of the debate. I do not have the good fortune to have been a member of the Standing Committee that dealt with this Bill, but those who were on the Committee will probably


remember the measure as the one that did away with the wages councils. It seems that that is the impact that the Bill has had on the public. Yesterday we had a full debate on the issue of the wages councils. The Tea Room round by the Whips has been a little more successful today. Yesterday, during that focus debate, we did not have the advantage of hearing any Conservative Member, apart from the Minister, support the abolition of the wages councils. Today we have heard some such support from the Government side.
I should like to put to the Minister a question that I would have put to one of his hon. Friends if he had chosen to give way to anyone during his speech: what do the Government regard as the lowest acceptable rate of pay? Do the Government believe that it is right that very large numbers of people should have to rely on social security benefits to support their income? If so, how does that accord with Tory philosophy? It seems to me to contradict entirely the philosophy that private enterprise should not only exist but prosper. I cannot believe that part of Tory philosophy is that private enterprise should be founded upon a situation in which bankruptcies and liquidations increase every year, in which more and more people find that their employers have gone bust without even making proper PAYE payments, and when more and more people are forced into low-wage employment.
I should like the Minister to deal with a particular problem that affects rural areas such as my constituency of Montgomery. A reality of life in rural mid-Wales and, I expect, in similar rural areas is that opportunities for work in agriculture are beginning to diminish as fast as in some heavy industries, such as coal and steel, in the past. As a result, we have an increasingly low-wage economy, in which people are looking increasingly for jobs that do not exist. What do the Government intend to do to ensure that people who find work in the tourist industry and in the residual industries in rural areas are not paid at abominably low rates?
I have visited factories in my constituency where wage rates, particularly for women, are extremely low. For example, two or two and a half years ago, women packing cosmetics were being paid less than £2 an hour. I am very pleased to say that the rates were raised shortly after my visit, and I hope that was not a coincidence. In many factories around the country women in particular are greatly disadvantaged in terms of wages. As was said yesterday, women—especially single parents and others in similar positions—will be particularly affected by the removal of the wages councils. The Government cannot be proud of that. [Interruption.] Would the hon. Member for Wirral, South (Mr. Porter) like me to give way to him? I think that he muttered something about my having missed out the ethnic minorities. I do not know whether that was intended to be a constructive contribution to the debate; in my view, it was a pretty disgraceful one. Does the hon. Gentleman want me to give way? I see that he does not. In that event I shall continue.
The Bill missed the opportunity for Government Departments to combine their resources, and the considerable talents of those who work in them and who can produce imaginative schemes at the drop of a Government pencil, in an attempt to produce a real strategy for employment in this country.

Mr. Deputy Speaker (Mr. Michael Morris): Order. The hon. and learned Gentleman well knows that a Third Reading debate must encompass what is in the Bill, not a future employment strategy.

Mr. Carlile: I was going to say, Mr. Deputy Speaker, that it was a disappointment that the speeches made both on the Floor of the House and in Committee revealed that the Department of Employment had done little to ensure that the Bill contained at least some of the opportunities that could have been included if a strategic approach had been adopted.
There are other disappointments as well as the provisions concerning the wages councils. In the context of employment rights, it is disappointing that the Government did not allow those who go before industrial tribunals to have legal aid. Few Labour Members here now were Members of Parliament when industrial tribunals were introduced. I am confident that Labour Members would now disagree with the deal that was done between the unions and the Labour Government. The unions did not want legal aid to be available for industrial tribunals because that might have reduced union membership. That was not a creditable deal.
Most Opposition Members, whether they belong to the Labour party, to my party or to any of the other Opposition parties, would agree that the rights of people who lose their jobs through redundancy or dismissal are not fairly protected when the employer can use solicitors and counsel to appear before the industrial tribunal but the employed person is rarely able to do so. Many employed people are extremely well represented by trade union representatives at industrial tribunals, but at some tribunals I have had the feeling that the employee has not had the resources to enable him to present his case with all the investigative and evidential resources available to the employer. In omitting to give legal aid to employed people going before industrial tribunals the Bill represents a missed opportunity.
I regret, too, that the maternity and paternity rights proposals discussed in the debates on the Bill have found favour with the Government only to a limited extent. In so far as the Bill takes the law forward and improves rights it is welcome, but what it does is extremely limited.
I am confident that many more Bills will come before the House involving the factors that I have mentioned, especially legal aid, wages councils, and maternity and paternity rights. The Government cannot be complacent in the belief that they have created a charter of rights of which a British Government can be proud. The Government's intransigence about the social chapter, and the intransigence of people such as the hon. Member for Southend, East (Sir T. Taylor), will evaporate as the years go by—but it will be shameful to see the British worker lagging behind those in other countries in the European Community because, compared with his colleagues elsewhere, he has fewer rights.

Mr. Oliver Heald: The hon. Member for Delyn (Mr. Hanson) said that the Bill was aimed at the wrong issues. I start by disagreeing profoundly with that statement. How can it be wrong to provide new rights for trade union members and for employees, including a whole raft of new maternity rights? How can it be wrong to improve the constitution of


industrial tribunals to cut delays? How can it be wrong to create conditions for new jobs by abolishing the wages councils?
The hon. Member for Delyn, like me, was here on Second Reading and served on the Standing Committee, so he knows that at that stage I said that the Bill was good. Having been through the whole Committee process and having heard the hon. Gentleman speak many times over those 55 hours, I am prepared to say that the Bill is better now.
The Bill has been improved partly because of the hon. Gentleman's contributions, and partly because of those of other members of the Committee. It is wrong for the hon. Gentleman and other Opposition Members to say that the Government did not respond to what they, and we, said in Committee. For example, the hon. Gentleman will recall that one of the points that he and other hon. Members made about trade union ballot scrutiny was that the confidentiality of individuals might be breached and their security put at risk if the sort of information available to scrutineers became common knowledge. On that issue the Government listened and acted. New clause 6 deals with the problem.
Much criticism was levelled at the Government on the basis that if there was a flat rate of check-off, it was ridiculous for the Bill to require notification of increase on an annual basis. The Government listened to that and acted. There was criticism that women did not have sufficient freedom to choose the starting date of their maternity leave. The Government listened and acted. On issues of individual safety, practical common sense and individual freedom the Government not only heard what was said but acted.
Hon. Members raised other issues, too, on which they would no doubt have liked their views to be represented in the final form of the Bill. But it is clearly wrong to say that there has not been a Committee process that has improved the Bill.
I especially welcome some of the measures that have not been generally discussed in the debate. The method of dealing with delays in industrial tribunals—by giving the chairman enhanced powers to deal with legal issues and issues of contract—will be a great help. Having attended industrial tribunals over the past year or so, I have seen the delays. Five months is the average in half the cases listed, and a delay of a year or more is not unknown. If we can transfer 25 per cent. of the work to the chairman only—and that would be the effect of the provision—waiting times will be cut dramatically. That does not harm in any way employers' and employees' confidence in the system of industrial tribunals and in the concept of the industrial jury.
I heard what the hon. and learned Member for Montgomery (Mr. Carlile) said about legal aid for industrial tribunals. In my view, legal aid would change industrial tribunals dramatically—

Mr. Alex Carlile: They would be fair.

Mr. Heald: I do not accept that. Over the years, industrial tribunals have developed from being informal at the outset to being far more legalistic. Nevertheless, the whole approach is still that people from each side of industry tackle the problem and try to solve it in a manner different from the adversarial system that we know in the courts.
My experience has always been that if an applicant is not represented by a lawyer, the chairman and the members of the tribunal bend over backwards to give him every assistance. Certainly people have not suffered as a result of not having the services of someone such as the hon. and learned Member or myself.

Sir Harold Walker: Possibly I am the only Member present who was a Member of Parliament when industrial tribunals were introduced. I do not recall the hon. and learned Member for Montgomery (Mr. Carlile), the spokesman for the Liberal party, being present. Bearing in mind that he is a lawyer, probably fishing for work, may I tell him that the original purpose in excluding legal aid was precisely the reason given by the hon. Member for Hertfordshire, North (Mr. Heald)—that we wanted industrial tribunals to be a means of informal jurisdiction rather than bring in the legalities and complexities which all too often accompany the presence of lawyers.

Mr. Heald: I agree entirely with the right hon. Gentleman. A unique quality of an industrial tribunal is that it is a common-sense tribunal where lay members can get at the truth of the incident and the facts that are important to the case, partly because of their own experience of both sides of industry.
I have heard the impassioned plea of Opposition Members who say that if wages councils are destroyed, the fabric of society will be destroyed and people on low wages will suffer. There is a choice: low pay or no pay. There is no doubt that minimum wage regimes anywhere in the world cost jobs. As my hon. Friend the Member for Eltham (Mr. Bottomley) said yesterday, one may decide that it is a price worth paying. That is fair enough, but it is not right for Opposition Members to lecture us on the basis that there is not a price to pay for minimum wage legislation.
France has high unemployment; one reason is minimum wage legislation. One reason why Britain has lower youth unemployment than France, Spain, Greece and other European countries is that they all have minimum wage legislation.
If we are seeking a strategy to deal with unemployment, we have to take that issue into account. Is it right to have more jobs, even if some of them are less well paid, or do we say that there is a certain level at which we will pin the minimum wage and that we will bear the cost in terms of fewer jobs?
I was interested to read in the Daily Mail yesterday a remark by Lord Jakobovits, the former chief rabbi:
Idleness wrecks and corrupts. Any job, no matter how lowly the pay, is better than that.
It is important to have a sense of reality in the debate. With 17 million unemployed across Europe and with people desperate to work, many of them wanting the flexible, part-time jobs that wages councils deal with, the issue should be addressed seriously. The abolition of wages councils will provide a flexible method of employment and will give people more job opportunities.

Mr. John Hutton: It could be said that the Bill is a sad and unconvincing measure. It has more to do with satisfying the ideological fixations of the union bashers and the labour market deregulators than with the social and economic difficulties facing the British


people after 14 years of the Government's ruinous economic and industrial policies. If those are the Bill's objectives, I do not think it satisfies either of them.
Yesterday and today, the Bill has been attacked from both the left and the right of the Conservative party. Many Conservative Members are deeply concerned about some of the provisions. Some of those concerns have been expressed today.
Following the hon. Member for Hertfordshire, North (Mr. Heald), whom it is always a pleasure to follow, I think it worth putting on the record that we on the Labour Benches have given limited endorsement to some parts of the Bill. We cannot give those parts our complete endorsement because they do not go far enough. As we have said throughout the proceedings, we believe that at some time we may have to tidy up the mistakes of the Department of Employment.
The limited parts of the Bill which we can endorse have been completely overshadowed by other parts which have been drawn to our attention by my hon. Friends and some Conservative Members. I am thinking particularly of the abolition of wages councils in clause 28. Today at least we have had the benefit—if that is the right word; I am not convinced that it is—of hearing some justification for the abolition of wages councils, but the House has been bitterly disappointed.
We heard a ludicrous speech by the hon. Member for Langbaurgh (Mr. Bates), who clearly thought that the abolition of wages councils was a matter for hilarity and humour. I do not think that that hilarity will be shared by the 2·5 million people, and particularly the 2 million women, who will be exposed to the evils of low wages and exploitation by employers. If that is the best that Government Back Benchers can do, it is pathetic.
Clause 18 establishes the so-called commission for protection against unlawful action. When the Government are cutting the legal aid budget and withdrawing from the postal ballot regime established in the Employment Act 1980, at the same time to throw money at a ludicrous commissioner seems to be absurd. How is it possible to cut legal aid and to withdraw from the postal ballot regime while spending millions to support frivolous and absurd litigation?
There are also absurd provisions on check-off in clause 11. The Government have yet to provide any coherent justification for the check-off regime which they propose as the law of the land. They cannot provide justification, because there is none. Clearly, the purpose of clause 11 is to strangle check-off arrangements. That will damage industrial relations, and it was not requested by employers.
Significantly, there is tension between parts of the Bill which seek to improve the employment rights of individuals and other parts which will take rights away. There is a mix of deregulation and regulation. I think that that is why the Bill worries many Conservative Members, particularly the hon. Member for Southend, East (Sir T. Taylor), who unfortunately is not in his place.
Parts of the Bill are so badly drafted—again I am thinking of clause 18—that they look like three cherries on a fruit machine for lawyers. It is no part of the business of the House or of hon. Members to enact legislation which will have that result. The law which we are making is not

clear or concise. It will not improve the employment rights of individuals. It will simply generate work for grossly overpaid lawyers. That is not a sensible use of our time.
The principles behind the Bill were out of date before the measure was presented. A party which proclaims the value of deregulation as a method of stimulating employment is presiding over chronic, mass and rising employment. Clearly the Government have no answers to the accusation that the economy is out of control. All they can produce is this absurd attempt to abolish the minimum wages set by wages councils.
The Bill is a sad reflection on the Government's economic ambitions. Not many Conservative Members have been part of our proceedings; I can only conclude that they were too ashamed and embarrassed to participate. I hope that those who have had the benefit of hearing the arguments deployed by my right hon. and hon. Friends will come to the only possible conclusion—to reject the Bill on Third Reading and to restore some sanity and decency to employment rights.

Mr. Peter Bottomley: I apologise to the House for not being present for the earlier speeches. I was serving on a Select Committee. As a consequence, I will speak briefly.
If we are to say that levels of pay are the most important factor in employment and that we should allow them to come down, we should consider not just the 2·7 million who are covered by wages councils; to be consistent, we should talk about teachers, doctors, nurses, dentists and all the others who, as my hon. Friends and I can claim with pride, have seen an increase in their real earnings which restored part of the fall which took place under the Labour Government. Going back to what happened before 1979 is not a helpful way of dealing with trade union and employment legislation.
We need to recognise when we resist parts of the social chapter—one of the issues that has come up in our debates on the Bill—that the European Community proposals to limit the number of hours that people work do not apply to executives, to European Commissioners or to Members of Parliament. They might apply to people who have high manual earnings or who have low manual earnings. I do not go along with such a proposal because I do not believe that it is necessary. Similarly, much of what is in the Bill is not necessary. Aspects of it may be welcome to some, but it is not necessary in the main, with the exception of measures required by European directives and European judgments.
Some provisions, such as those on political fund ballots, are important because such ballots need to be carried out fairly. I hope that when union members decide, under the regular review, whether they want to maintain a political fund, more and more of them will say that they do not. I hope that, even if they have a political fund, they do not just keep paying money to the Labour party. That is damaging to the Labour party, to the trade unions and to the Conservative party. If we merely see trade unions as supporting one section of our political opponents, we shall react as we have with some elements of the Bill.
If more hon. Members had listened to a Radio 4 programme a week ago when Brian Widlake dealt with poverty and with people who had lost their jobs, their attitude to wages councils would be different. Many of


those interviewed were prepared to take work not just at poverty wages, but below poverty wages. Hon. Members would then have looked more carefully at the research evidence quoted by the Department of Employment on the employment consequences of a change in the lowest rates of pay under the wages councils orders.
I repeat one point I made last night. The only serious evidence—it is pretty weak at that—that Employment Ministers have put forward is that if the rate of pay for people at the bottom of the wages councils industries fell by between 15 per cent. and 20 per cent., there might be a 1 per cent. increase in employment. I have always accepted that there might be an employment impact. However, I believe that virtually to eliminate pay—a drop in the rate of pay of 20 per cent.—for an increase from 2·7 million to 2·727 million is out of order. It does not make sense. I am very surprised that that proposal is being put forward.
There is a price to pay for the abolition of the wages councils which is far greater than the price that we pay for having them. If that balance of pain is being carried by those who are far worse off than ourselves, I believe that we should take their interests more seriously when we consider legislation.
The House cannot be said to be giving whole-hearted consent to the Bill. I hope that the other place will feel free to consider some of the issues from the beginning. For the Bill to have gone through Report without the right wing of the Tory party speaking in support of Ministers shows that we have gone beyond the days of the 1980s when such people supported what was happening.
I take a pretty moderate approach. I can see the faults in trade unions, in political parties and in some official arrangements. The fact that I oppose so many of the details of the Bill suggests to me that we should hear the reflections of the other place. I hope that the Bill comes back with some changes.

Mr. Sam Galbraith: I first pay a compliment to the Ministers—the hon. Members for Stirling (Mr. Forsyth) and for Derbyshire, West (Mr. McLoughlin). I take the view that if the hon. Member for Stirling can damage my street credibility, I can certainly damage his. I believe that I speak for all Opposition Members when I say how grateful we are for the way in which the Committee was conducted, and for the reasonable and constructive manner in which issues were debated. It made a pleasant change from my previous experience in Committee with the hon. Member for Stirling, when we engaged in trench warfare night in and night out, and came out with the Bill almost unchanged.
Matters have been different this time. The hon. Member for Stirling has made concession after concession after concession after concession after concession—I told him that I would damage his street credibility—to the extent that the Bill is significantly changed. We are grateful for that, small mercy though it is.
We conclude our proceedings on the Bill on the eve of the announcement that the official unemployment figure is, almost certainly, above 3 million–4 million in real terms. Twenty seven people are now chasing every vacancy, at a cost to the taxpayer of £27 billion. The number of people employed has fallen by 8 per cent. since 1979 and the number of those employed in manufacturing industry has fallen by a staggering 38 per cent. over the same period.
Rather than doing anything significant, the Government have preferred once again to stand aside. In this predicament, does the Department of Employment introduce a Bill to help the long-term unemployed? No, it does not. Does it introduce measures to reskill the work force? No. Does it introduce measures to build a well-paid, highly motivated work force? No. Instead, the Department has introduced a Bill which is partly out of date, which is mean-minded in its intentions and which will have no effect on the employment prospects of the nation.
With 4 million people unemployed, the only job creation measure that the Government can introduce is the abolition of the wages councils. Apparently, the only way in which we can price ourselves into jobs is by pricing ourselves so low that it is difficult to exist.
We have had numerous contributions on the wages councils. Tonight, for the first time, we have had contributions from Conservative Members. None of them produced arguments in favour of abolition. Instead, Conservative Members produced arguments against our arguments for retaining the wages councils. That shows the bankruptcy of Conservative Members.
As my hon. Friend the Member for Barrow and Furness (Mr. Hutton) said, probably the most ludicrous contribution was the one from the hon. Member for Langbaurgh (Mr. Bates). I am sorry that he is not here now. The hon. Gentleman thought that it was all very hilarious and he used the opportunity to mock the disabled. He seemed to think that it was funny that there was a wages council for those who needed invalid carriages. I trust that the fact that he seemed to think that it was a matter for laughter will be noted by the disabled in his constituency.
We also had a contribution from a member of the Standing Committee, the hon. Member for Scarborough (Mr. Sykes). The best thing that I can say is that it was an extremely short contribution. I did not understand his logic. He said that he had been approached by a business man who opposed the wages councils because he believed that they were inflexible and that they were holding back his progress. This business man never paid wages councils rates; he always paid well above those rates. Yet for some reason, the wages councils were an imposition on him. I still fail to see the logic of that.
We had the usual contribution from another member of the Committee, the hon. Member for Teignbridge (Mr. Nicholls). Once again, he was somewhat patronising and dismissive. He fell into the usual fallacy of confusing minimum wage legislation with wages councils. The two issues are related, but they are not the same and it is important always to distinguish between them.

Mr. Nicholls: Will the hon. Gentleman give way?

Mr. Galbraith: I hope that the hon. Gentleman will forgive me if I do not, although I referred to him. He will realise that I am trying to get on, and he knows that I usually give way.
The Government gave no reasons for the abolition of the wages councils, so I shall give them some assistance by trying to crystallise what their arguments might be. They may care to muse about them in future. Basically, there are three arguments for abolishing wages councils. The first is that those who work in wages councils industries do so for


pin money. The second is that wages councils destroy jobs and the third is that they are an anachronism. That would be the kernel of the Government's argument.
The argument that people in wages councils industries work for pin money, as the Secretary of State implied, does not hold up when we look at the figures. The figure of 76·3 per cent. for those in wages councils industries who are in households with a second income is not very different from the equivalent figure of 72·6 per cent. for those in non-wages councils industries. There is no evidence that those in wages councils industries are different. If those who work in wages councils industries are working for pin money, so are those from double-earner homes who work elsewhere—including, I presume, the Secretary of State herself.
Conservative Members' second argument is that wages councils destroy jobs. I hear assertions and I hear opinions on that, but I have yet to hear arguments to justify them. Conservative Members must learn that opinion is not fact —that the two must be separated. I have read most of the learned academic discussions referred to by the Under-Secretary of State in response to the hon. Member for Eltham (Mr. Bottomley). The academic evidence is at best confused. If anything, it shows that wages councils do not destroy jobs and that, where they are effective and properly policed, they have a positive effect on employment. So the second argument is no basis for abolishing wages councils.
The final argument, advanced by the hon. Member for Teignbridge—I hope that he will not want to intervene just because I have mentioned him again—is that wages councils are an anachronism. The hon. Gentleman took the opportunity to mock Winston Churchill. The Tory party has come to a sad—

Mr. Nicholls: On behalf of both myself and Sir Winston Churchill, I ask the hon. Gentleman to accept that I was not mocking Sir Winston; I was mocking Labour Members' assertions that, for these purposes, he was on their side of the argument.

Mr. Galbraith: I realised that the hon. Gentleman would try to gloss over the fact that he mocked Winston Churchill, but it was clear to us all that that was what he was doing. It is a sad day when even in the Tory party Winston Churchill is a figure of fun.
I have explained previously that the fact that something has been around for a long time and may in some respects be out of date is not of itself a reason to abandon it; rather, it is a reason to develop it and take it further. The House of Lords is out of date, yet a Bill to abolish the House of Lords has yet to come before the House.
The hon. Member for Southend, East (Sir T. Taylor) referred to the Transfer of Undertakings (Protection of Employment) Regulations and the acquired rights directive. The Committee spent some time considering that matter, and we were given the benefit of the Attorney-General's views on that. He came ostensibly to clarify the position, although I think that the general view of hon. Members on both sides of the Committee was that it would have been better if he had not, because we were left even worse off than we had been before.
The gist of the Attorney-General's position was that nothing had changed—the acquired rights directive had

always applied, so the regulations had always applied to privatisations and contracting out. I think that that is the position. What has changed is that people now know about the acquired rights directive and they know that it applies equally to undertakings that are privatised. The Government were involved in a cover-up—an attempt to pretend that the directive did not apply and to get round it by including in the original legislation a provision to the effect that it did not apply to commercial undertakings. That went against the acquired rights directive. The Government tried to create a fog so that no one would realise what their rights were, but they were found out and, as the Minister said, the only important issue now is what the acquired rights directive says about appeals being made on that basis irrespective of what is in the British law.
That being the case, is it not time for the Government to give clear guidance to everyone involved—to employers, the Department and workers—so that everyone knows the position? Given that the Bill is supposed to be about the rights of individual trade unionists and workers, let us give them guidance concerning their rights and what they can claim.
The Bill has its good parts. We heard from my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) about the maternity rights and health and safety provisions. I should like to put on record again my view that many of those provisions are included in the Bill principally because the European Community wished them to be in the Bill—they fulfil our obligations in Europe. The Minister and numerous Conservative Members made it clear that if they had been given their way, many of the provisions would not be in the Bill. The Government included them because they were under legal pressure to do so.
I make a small exception in respect of the health and safety provisions, which I know the Minister supports. I am grateful to him for the concessions that he made. Lest there be any further misconception, I repeat that had the Government been left to their own devices, the good parts of the Bill—the provisions dealing with maternity rights and health and safety—would have been excluded.
Part I of the Bill contains the trade union legislation. It is based on the ideology of the 1970s and early 1980s—on the premise that the only thing wrong with this country is that the trade unions are too powerful and that if we introduce legislation to neuter them and remove their powers, we shall attain nirvana. That policy failed miserably in the 1980s and it will fail again.
In 1979, when trade unions were supposed to be the reason for all our problems, there were 23 million people employed; there are now 21 million—a fall of 8 per cent. In 1979, there were 7 million people employed in manufacturing industry; now there are only 4·5 million —a fall of 38 per cent. In 1979, we had a trade surplus; now, despite North sea oil, we have a trade deficit that grows by the day.
The Government's attack on the trade unions can therefore be seen to have been based purely on ideology and on spite. Look at the check-off clauses, on which the Minister was in disarray last night and on which he continues to be in disarray today. The clauses will neither enhance the rights of individuals—no one wants them—nor improve the wealth and prosperity of the country.
Trade unions and their members never were and never will be this nation's industrial problem. Good trade unions


working with Government and industry in close co-operation are an essential part of our industrial development. Rather than be treated as the Government's whipping boys, they should be recognised as part of the basic and essential engine of recovery.
Let us hope that, with the passing of the Bill, the dogma and ideology that have been the basis of all the anti-trade union legislation have finally been laid to rest so that trade unions and their members can once again be encouraged and given the tools to develop prosperity for this country. The Bill does not achieve that. It hinders the process. That is why we shall oppose it tonight.

The Minister of State, Department of Employment (Mr. Michael Forsyth): I thank the hon. Member for Strathkelvin and Bearsden (Mr. Galbraith) for his kind tribute to me and to my hon. Friend the Under-Secretary. I reciprocate by saying that the hon. Gentleman and the hon. Members for Holborn and St. Pancras (Mr. Dobson), and for Gateshead, East (Ms. Quin) could not have behaved more courteously or constructively during our proceedings. I should also pay tribute to my hon. Friends who, by their eloquence, restrained me from making too many concessions during the passage of the Bill.
I hope that hon. Members will not be embarrassed by that tribute. The TUC was quoted in one of the national newspapers as saying that it had achieved more on this Bill than on all the others put together. I am sure that that is a result of the constructive approach taken by the Opposition Front-Bench spokesmen and their colleagues and by my hon. Friends.
Having paid his tribute, the hon. Member for Strathkelvin and Bearsden ruined everything by complaining about the Bill. He said that the Bill does not do anything to help the long-term unemployed or about training or to meet the economic problems that we face. The plain fact is that we do not need legislation to tackle the economic problems of a recession. What we need is a Government committed to the policies that this Government endorse—low inflation, low interest rates and the control of public expenditure—and a Government who are prepared to act in the interests of individuals rather than a party that is clearly dominated by and in the pocket of the trade unions. That was clear from the proceedings on the Bill.
The hon. Member for Strathkelvin and Bearsden talked about pin money. He attributed that expression to my right hon. Friend the Secretary of State. My right hon. Friend has never implied that pin money was involved or said anything about it. The person who used the expression "pin money" rather shockingly was the chairman of the Equal Opportunities Commission. If the hon. Gentleman has a complaint about the expression, he should take it up with that commission.
The hon. Member for Holborn and St. Pancras said that not a single argument that he put in Committee had been lost. I had the impression that he had not even found a single argument in Committee, much less lost one. He said that his vision was one in which everyone would have a job and be paid what their ambition should be. I find it astonishing—[Interruption.] The hon. Member for Birkenhead (Mr. Field) said that he did not say it, but I wrote it down because I was so surprised by what he said. He should look it up in the record. The socialist Utopia

held out by the hon. Member for Holborn and St. Pancras is one which no socialist Government in the world have ever achieved, nor ever will achieve, because we know how it ends.
The hon. Gentleman spoke eloquently about his view of a minimum wage. The countries in the European Community that have embraced his ideas of a minimum wage are those with the highest levels of unemployment. Spain has announced unemployment of 20 per cent. That is hardly surprising, given its commitment to a minimum wage.
As the debate went on, the hon. Member for Holborn and St. Pancras slithered and slid and changed his position. Finally, we found out the Labour party's position on wages councils. The wages councils have dominated the debates and they are supported by the hon. Gentleman. But he said that if the wages councils were abolished, a Labour Government would not bring them back. That is the Labour party's position.
Opposition Members will fight to the last ditch to stop the Government abolishing the councils. They are so committed to the councils that, if they are ever in government, they will not bring them back. What a shambles. Instead, the hon. Gentleman told the House that he would introduce a national minimum wage. As my hon. Friend the Member for Teignbridge (Mr. Nicholls) said, a national minimum wage would destroy almost 2 million jobs in the United Kingdom. The hon. Gentleman sought as his authority his hon. Friend the Member for Birkenhead.

Mr. Dobson: Who supports him?

Mr. Forsyth: The hon. Gentleman asked: Who supports him?

Mr. Dobson: The Minister can misrepresent me as much as he likes. My hon. Friend the Member for Birkenhead (Mr. Field) supports the concept of a national minimum wage and the Minister should not say that he does not.

Mr. Forsyth: Having looked at the writing of the hon. Member for Birkenhead, it is clear that he said that a minimum wage will destroy jobs. Will the hon. Member for Holborn and St. Pancras say that all the other references that were quoted in the debate and the trade union leaders who were quoted are all being misquoted as well? Everyone knows that, if one puts up the price of labour, one will get less of it. It is like any other commodity. It is absurd for the hon. Gentleman to deny it.
Independent research has shown that a national minimum wage, with differentials being maintained, would destroy 2 million jobs. The truth is that the hon. Member for Holborn and St. Pancras is so in hock to the trade unions that he would rather sign up to a minimum wage and put more people on the dole than address the problem of unemployment in the United Kingdom.
The hon. Gentleman adduced an argument that he used yesterday. Hon. Members who followed the proceedings yesterday will recall that the hon. Gentleman said that wages councils could not destroy jobs because, at a time when there is a recession, the number of jobs has increased in the wages council industries and that that shows that the effect of wages councils is not to destroy employment.
In 1987, there were 2·472 million people in the wages councils ambit. By 1992, that figure had increased to 2·56


million—an increase of 89,000 or 3·6 per cent. in that period. In the service industries generally, which the wages councils overwhelmingly cover, the increase was 1 million or 7 per cent. So in the service industries as a whole, employment increased by twice as much as in the wages council industries. We will hear no more of that argument which the hon. Gentleman has unwittingly used in support of the Government's position.

Mr. Thurnham: Will my hon. Friend give way?

Mr. Forsyth: My hon. Friend should allow me to continue because I know that colleagues are anxious to speed the legislation on its way.
I should like to deal with a matter that was raised by my hon. Friend the Member for Southend, East (Sir T. Taylor). I share his lack of enthusiasm for the transfer of undertakings regulations. Those regulations implement an EC directive which was negotiated by the Labour party 16 years ago. Hon. Members present in the House who were not on the Committee may not be aware that the Labour Government believed that the acquired rights directive which they signed in 1977 would exclude the public sector. That does not say much for their claims about people in the public sector being defrauded by this Government.
The regulations that we introduced did no such thing. We limited the regulations to undertakings in the nature of a commercial venture. That did not exclude the public sector or privatisation, as the hon. Member for Holborn and St. Pancras claimed. In Committee, my right hon. and learned Friend the Attorney-General made it clear that the exclusion was narrow in scope. For example, it excludes only some charities that might be considered noncommercial in nature. That exclusion is being removed in clause 26 of the Bill. It is not the case that people have been defrauded because of the minor and technical deficiency in the way in which the directive was implemented.
My hon. Friend the Member for Southend, East asked whether the Government had resisted the Commission's attempt to enforce the directive. I have been told that, if this Government had been in office in 1977, we would never have adopted the directive in the first place. My hon. Friend is mistaken in the great significance that he attaches to the minor amendments to the regulations in clause 26. As I said, the terms of the directive are significant and we want to examine them under the principles of subsidiarity which are enshrined in article 3b of the Maastricht treaty. I suggest that the Clause 26 group should rename itself the acquired rights directive group. The amendments in clause 26 do not alter the impact of the directive.

Sir Teddy Taylor: While I accept that the Minister is a born fighter, I ask one simple question: has the European Community sent a letter asking the Government to make more changes which, in my opinion, will basically bust privatisation, as others have said? Why did the Minister not fight? Why did the Government not take them to court? I am not accusing the Minister; I am accusing those who made the decisions.

Mr. Forsyth: The answer to my hon. Friend's question is that the changes that arose from the infraction proceedings do not alter the meaning and scope of the directive in the way that he believes. While he may believe that the directive is having an adverse effect on competitive

tendering, that is a matter which can be addressed only by changing the terms of the directive. For that reason, my right hon. Friend the Secretary of State will press, in line with the commitment that we have made to subsidiarity, for those matters to be determined in this place according to the interests of competitive tendering and other matters.
We have had a number of debates on the principles behind the Bill. Although the Labour party may vote against the Bill tonight, I hope that we shall see the same thing happening on this legislation as happened on other similar legislation. This Government rid the country of the tyranny of the closed shop and gave ordinary members the rights and protections that they rightly expected. As a result, trade union bosses must now attract members and listen to their views, rather than taking them for granted, as they did so often in the past. Our legislation has moved away from the confrontational, collective style of industrial relations to one in which employees are increasingly valued as individuals. Although the Opposition now say that they would support those changes, they voted against them at the time. No doubt they will vote against the Bill tonight, even though they know in their heart of hearts that most of the measures demand support and will be of benefit to their constituents. I commend the Bill to the House.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 312, Noes 275.

Division No. 156]
[7.09 pm


AYES


Adley, Robert
Butcher, John


Ainsworth, Peter (East Surrey)
Butler, Peter


Alexander, Richard
Butterfill, John


Alison, Rt Hon Michael (Selby)
Carlisle, John (Luton North)


Allason, Rupert (Torbay)
Carlisle, Kenneth (Lincoln)


Amess, David
Carrington, Matthew


Ancram, Michael
Carttiss, Michael


Arbuthnot, James
Cash, William


Arnold, Jacques (Gravesham)
Channon, Rt Hon Paul


Arnold, Sir Thomas (Hazel Grv)
Clappison, James


Ashby, David
Clark, Dr Michael (Rochford)


Aspinwall, Jack
Clarke, Rt Hon Kenneth (Ruclif)


Atkins, Robert
Clifton-Brown, Geoffrey


Atkinson, David (Bour'mouth E)
Coe, Sebastian


Atkinson, Peter (Hexham)
Congdon, David


Baker, Rt Hon K. (Mole Valley)
Conway, Derek


Baker, Nicholas (Dorset North)
Coombs, Anthony (Wyre For'st)


Baldry, Tony
Coombs, Simon (Swindon)


Banks, Matthew (Southport)
Cope, Rt Hon Sir John


Banks, Robert (Harrogate)
Couchman, James


Bates, Michael
Cran, James


Batiste, Spencer
Critchley, Julian


Bellingham, Henry
Currie, Mrs Edwina (S D'by'ire)


Bendall, Vivian
Curry, David (Skipton & Ripon)


Beresford, Sir Paul
Davies, Quentin (Stamford)


Bitten, Rt Hon John
Davis, David (Boothferry)


Blackburn, Dr John G.
Day, Stephen


Body, Sir Richard
Deva, Nirj Joseph


Booth, Hartley
Devlin, Tim


Boswell, Tim
Dickens, Geoffrey


Bottomley, Rt Hon Virginia
Dicks, Terry


Bowden, Andrew
Dorrell, Stephen


Bowis, John
Douglas-Hamilton, Lord James


Boyson, Rt Hon Sir Rhodes
Dover, Den


Brandreth, Gyles
Duncan, Alan


Brazier, Julian
Duncan-Smith, Iain


Bright, Graham
Dunn, Bob


Brooke, Rt Hon Peter
Durant, Sir Anthony


Brown, M. (Brigg & Cl'thorpes)
Dykes, Hugh


Browning, Mrs. Angela
Eggar, Tim


Bruce, Ian (S Dorset)
Elletson, Harold


Budgen, Nicholas
Emery, Rt Hon Sir Peter


Burns, Simon
Evans, David (Welwyn Hatfileld)






Evans, Jonathan (Brecon)
Knight, Dame Jill (Bir'm E'st'n)


Evans, Nigel (Ribble Valley)
Kynoch, George (Kincardine)


Evans, Roger (Monmouth)
Lait, Mrs Jacqui


Evennett, David
Lamont, Rt Hon Norman


Faber, David
Lang, Rt Hon Ian


Fabricant, Michael
Lawrence, Sir Ivan


Fenner, Dame Peggy
Legg, Barry


Field, Barry (Isle of Wight)
Leigh, Edward


Fishburn, Dudley
Lennox-Boyd, Mark


Forman, Nigel
Lidington, David


Forsyth, Michael (Stirling)
Lilley, Rt Hon Peter


Forth, Eric
Lloyd, Peter (Fareham)


Fowler, Rt Hon Sir Norman
Lord, Michael


Fox, Dr Liam (Woodspring)
Luff, Peter


Fox, Sir Marcus (Shipley)
Lyell, Rt Hon Sir Nicholas


Freeman, Roger
MacGregor, Rt Hon John


French, Douglas
MacKay, Andrew


Fry, Peter
Maclean, David


Gale, Roger
McLoughlin, Patrick


Gallie, Phil
McNair-Wilson, Sir Patrick


Gardiner, Sir George
Madel, David


Garel-Jones, Rt Hon Tristan
Maitland, Lady Olga


Garnier, Edward
Major, Rt Hon John


Gill, Christopher
Malone, Gerald


Gillan, Cheryl
Mans, Keith


Goodlad, Rt Hon Alastair
Marland, Paul


Goodson-Wickes, Dr Charles
Marlow, Tony


Gorman, Mrs Teresa
Marshall, John (Hendon S)


Gorst, John
Marshall, Sir Michael (Arundel)


Grant, Sir Anthony (Cambs SW)
Martin, David (Portsmouth S)


Greenway, Harry (Ealling N)
Mates, Michael


Greenway, John (Ryedale)
Mawhinney, Dr Brian


Griffiths, Peter (Portsmouth, N)
Mayhew, Rt Hon Sir Patrick


Grylls, Sir Michael
Mellor, Rt Hon David


Gummer, Rt Hon John Selwyn
Merchant, Piers


Hague, William
Milligan, Stephen


Hamilton, Rt Hon Archie (Epsom)
Mills, Iain


Hamilton, Neil (Tatton)
Mitchell, Andrew (Gedling)


Hampson, Dr Keith
Mitchell, Sir David (Hants NW)


Hannam, Sir John
Moate, Sir Roger


Hargreaves, Andrew
Monro, Sir Hector


Harris, David
Montgomery, Sir Fergus


Haselhurst, Alan
Moss, Malcolm


Hawkins, Nick
Needham, Richard


Hawksley, Warren
Nelson, Anthony


Hayes, Jerry
Neubert, Sir Michael


Heald, Oliver
Newton, Rt Hon Tony


Heathcoat-Amory, David
Nicholls, Patrick


Hendry, Charles
Nicholson, David (Taunton)


Heseltine, Rt Hon Michael
Nicholson, Emma (Devon West)


Hicks, Robert
Norris, Steve


Higgins, Rt Hon Sir Terence L.
Onslow, Rt Hon Sir Cranley


Hill, James (Southampton Test)
Oppenheim, Phillip


Hogg, Rt Hon Douglas (G'tham)
Ottaway, Richard


Horam, John
Page, Richard


Hordern, Rt Hon Sir Peter
Paice, James


Howard, Rt Hon Michael
Patnick, Irvine


Howarth, Alan (Strat'rd-on-A)
Patten, Rt Hon John


Howell, Rt Hon David (G'dford)
Pattie, Rt Hon Sir Geoffrey


Hughes Robert G. (Harrow W)
Pawsey, James


Hunt, Rt Hon David (Wirral W)
Peacock, Mrs Elizabeth


Hunt, Sir John (Ravensbourne)
Pickles, Eric


Hunter, Andrew
Porter, Barry (Wirral S)


Hurd, Rt Hon Douglas
Porter, David (Waveney)


Jack, Michael
Portillo, Rt Hon Michael


Jackson, Robert (Wantage)
Powell, William (Corby)


Jenkin, Bernard
Rathbone, Tim


Jessel, Toby
Redwood, John


Johnson Smith, Sir Geoffrey
Renton, Rt Hon Tim


Jones, Gwilym (Cardiff N)
Richards, Rod


Jones, Robert B. (W Hertfdshr)
Riddick, Graham


Jopling, Rt Hon Michael
Robathan, Andrew


Kellett-Bowman, Dame Elaine
Roberts, Rt Hon Sir Wyn


Key, Robert
Robertson, Raymond (Ab'd'n S)


Kilfedder, Sir James
Robinson, Mark (Somerton)


King, Rt Hon Tom
Roe, Mrs Marion (Broxbourne)


Kirkhope, Timothy
Rowe, Andrew (Mid Kent)


Knapman, Roger
Rumbold, Rt Hon Dame Angela


Knight, Mrs Angela (Erewash)
Ryder, Rt Hon Richard


Knight, Greg (Derby N)
Sackville, Tom





Sainsbury, Rt Hon Tim
Thompson, Patrick (Norwich N)


Shaw, David (Dover)
Thornton, Sir Malcolm


Shaw, Sir Giles (Pudsey)
Thurnham, Peter


Shephard, Rt Hon Gillian
Townend, John (Bridlington)


Shepherd, Colin (Hereford)
Townsend, Cyril D. (Bexl'yh'th)


Shepherd, Richard (Aldridge)
Tracey, Richard


Shersby, Michael
Tredinnick, David


Sims, Roger
Trend, Michael


Skeet, Sir Trevor
Twinn, Dr Ian


Smith, Sir Dudley (Warwick)
Vaughan, Sir Gerard


Smith, Tim (Beaconsfield)
Waldegrave, Rt Hon William


Soames, Nicholas
Walden, George


Spencer, Sir Derek
Walker, Bill (N Tayside)


Spicer, Sir James (W Dorset)
Waller, Gary


Spicer, Michael (S Worcs)
Ward, John


Spink, Dr Robert
Wardle, Charles (Bexhill)


Spring, Richard
Waterson, Nigel


Sproat, Iain
Watts, John


Squire, Robin (Hornchurch)
Wells, Bowen


Stanley, Rt Hon Sir John
Wheeler, Rt Hon Sir John


Steen, Anthony
Whitney, Ray


Stephen, Michael
Whittingdale, John


Stern, Michael
Wiggin, Sir Jerry


Stewart, Allan
Willetts, David


Streeter, Gary
Wilshire, David


Sumberg, David
Winterton, Mrs Ann (Congleton)


Sweeney, Walter
Winterton, Nicholas (Macc'f'ld)


Sykes, John
Wolfson, Mark


Tapsell, Sir Peter
Wood, Timothy


Taylor, Ian (Esher)
Yeo, Tim


Taylor, John M. (Solihull)
Young, Sir George (Acton)


Taylor, Sir Teddy (Southend, E)



Temple-Morris, Peter
Tellers for the Ayes:


Thomason, Roy
Mr. David Lightbown and


Thompson, Sir Donald (C'er V)
Mr. Sydney Chapman.


NOES


Abbott, Ms Diane
Campbell-Savours, D. N.


Adams, Mrs Irene
Canavan, Dennis


Ainger, Nick
Cann, Jamie


Ainsworth, Robert (Cov'try NE)
Carlile, Alexander (Montgomry)


Allen, Graham
Chisholm, Malcolm


Alton, David
Clapham, Michael


Anderson, Donald (Swansea E)
Clark, Dr David (South Shields)


Anderson, Ms Janet (Ros'dale)
Clarke, Eric (Midlothian)


Armstrong, Hilary
Clarke, Tom (Monklands W)


Ashdown, Rt Hon Paddy
Clelland, David


Ashton, Joe
Clwyd, Mrs Ann


Austin-Walker, John
Coffey, Ann


Banks, Tony (Newham NW)
Connarty, Michael


Barnes, Harry
Cook, Robin (Livingston)


Barron, Kevin
Corbett, Robin


Battle, John
Corbyn, Jeremy


Bayley, Hugh
Corston, Ms Jean


Beckett, Margaret
Cousins, Jim


Beggs, Roy
Cox, Tom


Beith, Rt Hon A. J.
Cryer, Bob


Bell, Stuart
Cummings, John


Benn, Rt Hon Tony
Cunliffe, Lawrence


Bennett, Andrew F.
Cunningham, Jim (Covy SE)


Benton, Joe
Dafis, Cynog


Bermingham, Gerald
Dalyell, Tam


Berry, Dr. Roger
Darling, Alistair


Betts, Clive
Davies, Rt Hon Denzil (Llanelli)


Blair, Tony
Davies, Ron (Caerphilly)


Blunkett, David
Davis, Terry (B'ham, H'dge H'I)


Boateng, Paul
Denham, John


Boyce, Jimmy
Dixon, Don


Boyes, Roland
Dobson, Frank


Bradley, Keith
Donohoe, Brian H.


Bray, Dr Jeremy
Dowd, Jim


Brown, Gordon (Dunfermline E)
Dunnachle, Jimmy


Brown, N. (N'c'tle upon Tyne E)
Dunwoody, Mrs Gwyneth


Bruce, Malcolm (Gordon)
Eagle, Ms Angela


Burden, Richard
Eastham, Ken


Byers, Stephen
Enright, Derek


Caborn, Richard
Etherington, Bill


Callaghan, Jim
Evans, John (St Helens N)


Campbell, Mrs Anne (C'bridge)
Ewing, Mrs Margaret


Campbell, Ronnie (Blyth V)
Fatchett, Derek






Faulds, Andrew
Jones, Lynne (B'ham S O)


Field, Frank (Birkenhead)
Jones, Martyn (Clwyd, SW)


Fisher, Mark
Jones, Nigel (Cheltenham)


Flynn, Paul
Jowell, Tessa


Foster, Derek (B'p Auckland)
Kaufman, Rt Hon Gerald


Foster, Don (Bath)
Keen, Alan


Foulkes, George
Kennedy, Charles (Ross,C&S)


Fraser, John
Kennedy, Jane (Lpool Brdgn)


Fyfe, Maria
Khabra, Piara S.


Galbraith, Sam
Kilfoyle, Peter


Galloway, George
Kinnock, Rt Hon Neil (Islwyn)


Gapes, Mike
Kirkwood, Archy


Garrett, John
Leighton, Ron


Gerrard, Neil
Lestor, Joan (Eccles)


Gilbert, Rt Hon Dr John
Lewis, Terry


Godman, Dr Norman A.
Litherland, Robert


Godsiff, Roger
Livingstone, Ken


Golding, Mrs Llin
Lloyd, Tony (Stretford)


Gordon, Mildred
Llwyd, Elfyn


Gould, Bryan
Loyden, Eddie


Graham, Thomas
Lynne, Ms Liz


Griffiths, Nigel (Edinburgh S)
McAllion, John


Griffiths, Win (Bridgend)
McAvoy, Thomas


Grocott, Bruce
McCartney, Ian


Gunnell, John
Macdonald, Calum


Hain, Peter
McFall, John


Hall, Mike
McKelvey, William


Hanson, David
Mackinlay, Andrew


Hardy, Peter
McLeish, Henry


Harman, Ms Harriet
Maclennan, Robert


Harvey, Nick
McMaster, Gordon


Henderson, Doug
McNamara, Kevin


Heppell, John
Madden, Max


Hill, Keith (Streatham)
Mahon, Alice


Hinchliffe, David
Mandelson, Peter


Hoey, Kate
Marek, Dr John


Hood, Jimmy
Marshall, David (Shettleston)


Hoon, Geoffrey
Marshall, Jim (Leicester, S)


Howarth, George (Knowsley N)
Martin, Michael J. (Springburn)


Howells, Dr. Kim (Pontypridd)
Martlew, Eric


Hoyle, Doug
Maxton, John


Hughes, Kevin (Doncaster N)
Meacher, Michael


Hughes, Roy (Newport E)
Michael, Alun


Hughes, Simon (Southwark)
Michie, Bill (Sheffield Heeley)


Hutton, John
Michie, Mrs Ray (Argyll Bute)


Ingram, Adam
Milburn, Alan


Jackson, Glenda (H'stead)
Miller, Andrew


Jackson, Helen (Shef'ld, H)
Molyneaux, Rt Hon James


Jamieson, David
Moonie, Dr Lewis


Johnston, Sir Russell
Morgan, Rhodri


Jones, Barry (Alyn and D'side)
Morley, Elliot


Jones, leuan Wyn (Ynys Môn)
Morris, Rt Hon A. (Wy'nshawe)





Morris, Estelle (B'ham Yardley)
Skinner, Dennis


Morris, Rt Hon J. (Aberavon)
Smith, Andrew (Oxford E)


Mowlam, Marjorie
Smith, C. (Isl'ton S & F'sbury)


Mudie, George
Smith, Rt Hon John (M'kl'ds E)


Mullin, Chris
Smith, Llew (Blaenau Gwent)


Murphy, Paul
Smyth, Rev Martin (Belfast S)


Oakes, Rt Hon Gordon
Snape, Peter


O'Brien, Michael (N W'kshire)
Soley, Clive


O'Brien, William (Normanton)
Spearing, Nigel


O'Hara, Edward
Spellar, John


Olner, William
Squire, Rachel (Dunfermline W)


O'Neill, Martin
Steinberg, Gerry


Orme, Rt Hon Stanley
Stevenson, George


Parry, Robert
Stott, Roger


Pendry, Tom
Strang, Dr. Gavin


Pickthall, Colin
Straw, Jack


Pike, Peter L.
Taylor, Mrs Ann (Dewsbury)


Pope, Greg
Taylor, Matthew (Truro)


Powell, Ray (Ogmore)
Thompson, Jack (Wansbeck)


Prentice, Ms Bridget (Lew'm E)
Tipping, Paddy


Prentice, Gordon (Pendle)
Trimble, David


Prescott, John
Turner, Dennis


Primarolo, Dawn
Tyler, Paul


Purchase, Ken
Walker, Rt Hon Sir Harold


Quin, Ms Joyce
Wallace, James


Radice, Giles
Walley, Joan


Randall, Stuart
Wardell, Gareth (Gower)


Raynsford, Nick
Wareing, Robert N


Redmond, Martin
Watson, Mike


Robinson, Geoffrey (Co'try NW)
Welsh, Andrew


Roche, Mrs. Barbara
Wicks, Malcolm


Rogers, Allan
Wigley, Dafydd


Rooker, Jeff
Williams, Rt Hon Alan (Sw'n W)


Rooney, Terry
Williams, Alan W (Carmarthen)


Ross, Ernie (Dundee W)
Wilson, Brian


Ross, William (E Londonderry)
Winnick, David


Rowlands, Ted
Wise, Audrey


Ruddock, Joan
Worthington, Tony


Salmond, Alex
Wray, Jimmy


Sedgemore, Brian
Wright, Dr Tony


Sheerman, Barry



Sheldon, Rt Hon Robert
Tellers for the Noes:


Shore, Rt Hon Peter
Mr. Alan Meale and


Short, Clare
Mr. Jon Owen Jones.


Simpson, Alan

Question accordingly agreed to.

Bill read the Third time, and passed.

Revenue Support Grant (Scotland)

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): I beg to move,
That the Revenue Support Grant (Scotland) Order 1993, dated 2nd February 1993, which was laid before this House on 4th February, be approved.
I understand that with this it will be convenient to discuss at the same time the following motion:
That the Local Government Finance (Scotland) Order 1993, dated 2nd February 1993, which was laid before this House on 4th February, be approved.

Mr. Michael Connarty: On a point of order, Madam Deputy Speaker. The order is tabled in the name of the Secretary of State. I wonder why he is not here to move it and whether he is briefing the press, as he normally does, rather than bringing matters to our notice on the Floor of the House.

Madam Deputy Speaker (Dame Janet Fookes): The question of which Minister moves a motion is not a matter for the Chair and is therefore not a point of order.

Mr. Stewart: May I be allowed to continue the debate, which is normally introduced by the Minister responsible for local government finance? I appreciate that the hon. Member for Falkirk, East (Mr. Connarty) has not been long in the House.

Mr. Tony Worthington: On a point of order, Madam Deputy Speaker. It is not true that such orders would normally be taken by the Minister responsible for local government finance. This is part of a pattern of disrespect for the House shown by the Secretary of State for Scotland, who ducks out of every confrontation with the Opposition, and we are sick of it.

Madam Deputy Speaker: Order. As I have had cause to tell the House before, the accuracy and traditions of who speak and what they say are not matters for the Chair.

Mr. Bill Walker: On a point of order, Madam Deputy Speaker. Can you confirm that, under successive Governments, it has been in order for the appropriate Minister to reply to a debate in the House? The practice being followed today and on other days is no different from that of a previous Labour Government.

Madam Deputy Speaker: Yes.

Mr. Stewart: I am grateful, Madam Deputy Speaker. Perhaps we may continue with the debate. My right hon. Friend the Secretary of State is here, so may we ask Opposition Members to stop making idiots of themselves?
This is the annual opportunity for the House to debate the settlement for Scottish local authorities for the year ahead. I begin by making it clear that both orders have been the subject of full consultation with the Convention of Scottish Local Authorities, which raised no detailed issues on either of them.
I shall deal first with the main order under debate, the Local Government Finance Order, which represents the final stage of the 1993–94 settlement, details of which my right hon. Friend announced to the House on 12 November.
My right hon. Friend said that aggregate external finance for next year had been set at £5,165·1 million, which represents an increase of 3·5 per cent. in total on the

1992–93 figure. Because of the announcement of an extra £15 million on 2 December, the COSLA briefing uses the original 3·2 per cent. figure, but the corrected figure is 3·5 per cent., after the adjustments for the transfer of responsibility for further education colleges from local to central Government from 1 April 1993, and excluding the £63·4 million that was included in the settlement to meet the cost of care in the community and independent living fund responsibilities, which Scottish local authorities will assume from 1 April.
The settlement is accordingly fair and reasonable, especially in the light of the continuing fall in the rate of inflation. As hon. Members will no doubt have read in the COSLA brief, the figure cannot be regarded as "unrealistic".
As the report to the order explains, aggregate external finance has three components.

Mr. John Maxton: The Minister may intend to comment on this, but can he say how much the Government are allowing for non-collection of outstanding poll tax, and the result for local government finance; and also how much is included for the implementation of the council tax?

Mr. Stewart: We have certainly allowed for the implementation costs of the council tax, and have allowed more than the councils' estimates. I shall come to that later. To answer the hon. Gentleman's first question, aggregate external finance is related to local authority expenditure and not to non-collection.
I must explain to the hon. Gentleman and to the House how AEF is broken down. It has three components. The first is the provision for specific grants. For 1993–94, that provision is estimated at £397 million, and a breakdown of that estimate among the various specific grants is given in appendix B of the report.
The second component of AEF is what is described in the Local Government Finance Act 1992 as the
distributable amount of non-domestic rate income",
which, for 1993–94, has been set at £1,186 million. That represents my right hon. Friend's estimate of the total business rates payable to local authorities next year. That estimate is based on the 1993–94 rate poundages that my right hon. Friend announced on 14 January. Those poundages take account of the reduction of £68 million in the total amount of rates payable by Scottish business next year, as the next stage of the Government's policy of harmonising rate poundages north and south of the border as quickly as resources allow.

Mr. Maxton: How long will it take?

Mr. Stewart: The hon. Gentleman knows that our objective is to bring rates into line in 1995 or shortly thereafter. I can reassure him by saying that, so fair, Scottish businesses have saved the equivalent of £350 million a year as a result of the Government's policy. That is a substantial sum, which has been warmly welcomed throughout Scotland by businesses large and small.

Mr. Jimmy Hood: Am I right in assuming that the figure of £350 million that the Minister has just given includes the £68 million for the coming year? A letter from the Scottish Office gives a figure of £280 million up to the end of 1993. If the figure given by the Minister includes next year's amount, it may be misleading. I am sure that the Minister did not intend to mislead the House.
I have received a complaint from Clydesdale district council about the arbitrary way in which the Secretary of State has decided that local authorities in Scotland will have to make a £12 million contribution to the Government's uniform business rate policy. Regardless of what the Minister says about consultation with the Convention of Scottish Local Authorities, I am assured that there has been no consultation on the UBR policy. The Government have taken arbitrary action and have told local authorities that, without being consulted on it, they will have to contribute £12 million to the Government's policy.

Mr. Stewart: The consultation to which I was referring was the formal consultation on the orders. Obviously, COSLA is frequently consulted. The hon. Gentleman is correct to say that we have consistently asked local authorities for a small contribution from efficiency gains to the policy of bringing rate burdens north and south of the border into line. The main reason, historically, for the rate burdens being different has been the high level of expenditure, and therefore local taxation, in Scotland compared to England.

Mr. Hood: The Minister referred to a "small contribution". Is he saying that 15 per cent. of the total cost of Government policy is a small contribution? I suggest that 15 per cent. is a high contribution.

Mr. Stewart: If one considers £12 million in relation to the total expenditure of Scottish local authorities, it becomes apparent that it is a small contribution.
The hon. Gentleman asked me for a detailed breakdown of the figures. The reduction in 1990–91 was £80 million, with, on top of that, £100 million in 1991–92, £100 million in 1992–93 and, as the hon. Gentleman rightly said, £68 million in 1993–94.
Next year, there will be a change in the way that non-domestic rate income is treated. Under the 1992 Act, non-domestic rate income is to be pooled in Scotland with effect from 1 April, following the pooling in England and Wales in 1990. Under the pooling arrangements, Scottish local authorities will continue to be responsible for levying business rates, but the rates income collected will be paid into a central pool and distributed to authorities as a per capita amount based on the resident population of each authority.
With the agreement of COSLA, non-domestic rate income will be distributed to regional and islands authorities only. That will simplify the administration of the pooling arrangements for both local authorities and the Scottish Office. District councils will no longer have to maintain non-domestic rate income accounts.
The effect of distributing NDRI to regions and islands only is that districts will receive their AEF support solely in the form of rate support grant and specific grants. Districts will obviously receive proportionately more RSG and regions proportionately less RSG than would otherwise be the case. But I must emphasise that no authority will lose in terms of its overall level of AEF as a result of the new method of distributing NDRI.

Mr. Malcolm Chisholm: I understand the complications of comparing this year's aggregate external finance with last year's, because of

changes such as community care and the funding of further education, but those factors should be common throughout different regions. Therefore, why is aggregate external finance down by 0·8 per cent. in the Lothian region and up by 2·8 per cent. in the Borders region? Is that to do with band D equivalent properties, or is there another explanation for the variations?

Mr. Stewart: The overall figure for AEF, after taking account of the factors to which the hon. Gentleman referred, is up by 3·5 per cent. If he looks at the table, he will find that, in relation to grant-aided expenditure, Lothian is the equalising authority because it has a lower GAE figure per head than other regions. That factor in turn affects the total. As it happens, Eastwood is the equalising authority among district authorities. That is why Eastwood has a zero figure.

Mr. Chisholm: Is the Minister saying that Lothian region is receiving less money because there are more properties in higher council tax bands? If he is, does that not cause a problem, given that we know that, although property is more expensive in Edinburgh, the people who live in those properties are not always better off?

Mr. Stewart: It is a two-stage process, which I shall explain for the benefit of the hon. Gentleman and, indeed, the House. The revenue support grant totals £3,582·1 million for 1993–94. There is a full explanation in the report, but I shall summarise it for the hon. Gentleman.
The first stage is to equalise differences in authorities' spending needs as determined by the client group methodology—which is where Midlothian is the equalising authority. That methodology is reviewed regularly and agreed with the convention in the district committee of the working party on local government finance. Each authority's relative spending need is reflected in its grant-aided expenditure assessment figure.

Mr. George Foulkes: The Minister is a much wiser man than the junior Agriculture Minister, and I am grateful to him for giving way. In the context of the calculation of the needs element, does he agree that districts such as Cumnock and Doon Valley are disadvantaged by it? Such districts contain a large number of rural communities, each with its own cemetery, sports centre and so on, so revenue costs are much greater than they are for city areas. Not enough account is taken of that.
Secondly, Cumnock and Doon Valley has very high unemployment—almost 20 per cent., and I would not be surprised if tomorrow's figures show that it exceeds 20 per cent. That is appalling, and because of the requirement to keep within Government guidelines, Cumnock and Doon Valley has had to keep its budget down and cannot appoint an economic development officer to help to bring new industry to the area.
Are not such areas seriously disadvantaged by the criteria that the Minister has just described?

Mr. Stewart: From time to time, we do receive complaints from authorities about the criteria, but those criteria are carefully assessed, not by the Scottish Office acting alone but with the expertise of COSLA's technical experts on the distribution committee. A range of primary and secondary indicators are used, and the sparsity of population in an area is certainly taken into account.
As for Cumnock and Doon Valley's budget, the council will, on my calculations, be able to increase its estimated budget by just under 2 per cent. this year without hitting the capping level.

Mr. Foulkes: That is precisely my point. Cumnock and Doon Valley desperately needs jobs. The Minister and the Secretary of State have visited it, and they know the priorities—of which an economic development officer was one. But because of the Secretary of State's guidelines, the council cannot appoint such a person. Does the hon. Gentleman agree that that disadvantages the authority; and cannot something be done about it?

Mr. Stewart: It is open to Cumnock and Doon Valley, through COSLA, to go directly to the distribution committee and say that it does not believe that the factors in what is a highly technical calculation are entirely fair. That is how the authority should seek redress.
That is the first stage in the process. The second stage is straightforward, although it involves a change from the procedure adopted in the past few years. That is the point to which the hon. Member for Edinburgh, Leith (Mr. Chisholm) referred. Before, the amount of AEF remaining after the equalisation of spending needs was distributed to authorities on a straight per capita basis related to the number of community charge payers in each authority. That meant that there was an equalisation of spending need and an equalisation of resources among authorities. If they all spent, therefore, at GAE level, they could all set the same level of community charge.
This principle of equalisation of resources continues to apply, but with the replacement of the community charge by the council tax with effect from 1 April, the second stage procedure has had to be changed. Instead of distributing the remainder of AEF on a per community charge payer basis, the amount involved is allocated to authorities in proportion to the number of council tax band D equivalent properties in each authority. That answers the question asked by the hon. Member for Leith.
The effect of this change is to swing AEF support away from high-value property areas to lower-value property areas, but the principle underlying the distribution remains the same as under the community charge. It is that, if all authorities spend at their GAE level, they should all be able to set the same level of council tax.

Mr. James Wallace: Can the Minister confirm that COSLA's briefing figure that Shetland's maximum budget increase for the forthcoming year is minus 37·4 per cent. is correct? How does he expect the local authority to start to deal with that?
When the Minister deals with the islands, will he explain the following? How will the new pooling arrangements for the business rate operate, given that these are circumstances in which our per capita distribution will not be high but large sums of business rates have been paid in the past because of the presence of our oil terminals?

Mr. Stewart: As the hon. Gentleman says, the rate for the islands council is the same as the English rate. The objective is to bring other business rates that are above the English level down to the English level. The hon. Gentleman's council is in a rather unusual situation.
The hon. Gentleman may also be interested to learn that we have introduced changes to the special islands

needs allowance, following representations from the Western Isles council. I can confirm that we asked independent consultants to examine the way in which the special islands needs allowance was calculated, and we accepted their recommendations.
The provisional capping principles to which the hon. Gentleman referred are not dealt with in these orders, although the provisional principles announced by my right hon. Friend the Secretary of State showed the need for substantial reductions in expenditure for Shetland. But my right hon. Friend has already said that he would be prepared to accept a standstill budget. The hon. Member for Clydebank and Milngavie (Mr. Worthington) will be aware that the same applies to Clydebank.

Mr. Thomas Graham: How much assessment has the Scottish Office done of the loss of revenue from which many councils have suffered because of the huge number of company bankruptcies? We are extremely worried about that.

Mr. Stewart: The hon. Gentleman is right to say that non-domestic rate income can vary considerably from original estimates: it can go up or down. That is covered in the Revenue Support Grant (Scotland) Order 1993. The purpose of that order is to redetermine the amount of RSG payable to each Scottish local authority for each of the years 1990–91 and 1991–92.
These redeterminations are necessary in the light of the so-called AEF guarantee—an agreement with COSLA to guarantee the combined non-domestic rate income arid RSG figure notified to each authority at the time of the issue of the distribution proposals for the year in question. Such a guarantee is necessary because it is extremely difficult to calculate exact business rate income until such matters as valuations, appeals, empty properties and so on are dealt with. RSG can be increased or reduced in the light of experience. Adjustments have been made, and 45 authorities will receive more RSG and 20 will receive less as a consequence.
Next year's settlement is very fair and reasonable, and substantially above the rate of inflation. COSLA's original bid was made when inflation was considerably higher than it is today. The settlement is made against the background of the Government's policy on public sector increases, in the range of 0·5 per cent. to 1·5 per cent.
COSLA has said that the figures are not unrealistic, and with the scope that always exists for efficiency savings, there will be no need for cuts in services and jobs of the kind that are the subject of the scare stories that we hear every year. I commend this realistic settlement to the House.

Mr. Tom Clarke: I mean no disrespect to the Minister—to coin a phrase, I regard him as being a nice guy—but as an ex-president of the Convention of Scottish Local Authorities, and as an ex-vice president under George Sharp, I may say that if the Government had sent a less senior Minister than the Secretary of State for Scotland to meet COSLA, it would have asked for the Secretary of State. The House has the same right. I am greatly surprised that the Secretary of State is unable to be present for this important debate,


although he was courteous enough to write a note to me. I hope that the Secretary of State will be present for future debates.
This debate is about the Government's attack on Scotland—on our services and on our people. The measure unveiled by the Secretary of State is a betrayal of our children and their teachers, our elderly folk and their carers, and our public services—which have the support of the majority of the population of Scotland, no matter their means or how they vote. To suggest, as the Secretary of State did, that the settlement is either fair or adequate is not believed even by Tory councillors in Scotland, never mind anyone else.
In the 1980s, the Government cut the number of home helps, meals on wheels, teachers, libraries, and many other services that we Scots cherish, and the Secretary of State's announcement today means that cuts will continue into the 1990s. Doubtless that is welcome news to some of the right hon. Gentleman's hard-line colleagues, whose hatred of public services is on record—but almost every Scot will greet today's news with sadness and anger.

Mr. Bill Walker: I imagine that some of the hon. Gentleman's barbs are directed at people like myself. It is difficult to follow the hon. Gentleman's logic. At what point in the past 14 years has there been a reduction below the rate of inflation in public support for local government? Unless the hon. Gentleman can demonstrate one, he is misusing the word "cut".

Mr. Clarke: I hope to demonstrate that inflation is not itself a sufficient guide. Other elements, such as the obligations that the Government place on local councils, must be considered. We heard tonight, for example, that from April greater community care demands will be imposed on councils. The spectre of unemployment also makes demands on local councils, as do unpredictable problems such as flood damage. That ought to be recognised.

Mr. Hood: Got him!

Mr. Clarke: Even in education, we are making considerable progress.
The settlement is less than generous. COSLA's document indicates that it regards the settlement as penal—that is a strong word to use—and continues the Government attack on local democracy that we have seen for more than a decade, on crucial services, and on jobs—particularly on the eve of tomorrow's announcement, when we expect to hear that unemployment is a great deal worse.
Today's short debate is inadequate in terms of conducting Scottish affairs. This three-hour debate will end with a Division that will influence every individual, family and household in Scotland. That makes the case, if ever one needed to be made, for a Scottish Parliament, supported by the overwhelming majority of the Scottish people, that will have the right to consider such matters in detail and at length, with the representatives of each community involving themselves in the subsidiarity which the Scottish people endorse but which the Secretary of State has not yet recognised.

Mr. Phil Gallie: If there were a Scottish assembly, would not that place a massive charge on the people of

Scotland—and take cash away from the useful services that could and do need to be provided for the people of Scotland?

Mr. Clarke: The best people to decide that are the people of Scotland. They have made it plain that important, essential matters such as the settlement we are debating tonight, law and order, education, the fire service, roads, planning, infrastructure, employment, and promoting Scotland in Europe ought to be given far more consideration than a three-hour debate allows.

Mr. Gallie: rose—

Mr. Clarke: No, I will not give way to the hon. Gentleman again. As time is so limited, it would be impertinent of me to keep other hon. Members from catching Mr. Deputy Speaker's eye, having made the point that we have been given too little time.
The order represents power for one man—a man who is unable to be with us this evening. I refer to the Secretary of State for Scotland. It would not be so bad if the right hon. Gentleman represented Scotland in the Cabinet, but he appears to represent the Cabinet in Scotland. That is as unacceptable as the figures in the settlement, which adds to the numerous problems heaped on local councils, without the Government paying any regard to the difficulties that local authorities must confront.
The poll tax was rejected by the people of Scotland but was still imposed upon them, and it cannot be properly collected. That is no way to run any local government service. Any consultations with local authority representatives should lead the Government to taking the same view.
At the end of December 1992, non-payment of the poll tax totalled £478 million—more than 17 per cent. of the sum billed in the first three years of the tax. How can one run a local government system when central Government have devised an approach to finance that leaves such huge amounts uncollected? That total is heading for £498 million–50 per cent. Uncollected—in the coming year. How can local authorities fund the services that they want to provide, including the industrial development to which my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) referred when, because of the Government's absurd system, the revenue to do that is not there?
The fact is that the Government have spent millions upon millions on trying to bail themselves out of the results of the poll tax. What could the local authorities have done with that money? They could have spent it on libraries, education and the police, for instance. The Government's handling of local government finance has been a disaster—an administrative nightmare—not just for finance departments, but for every department in every council in Scotland. The Government, of course, will go on promising lower bills; even tonight we have heard a promise about the council tax which is yet to materialise. At the same time, the Government will continue to blame local authorities for the inevitably reduced delivery of services—at a huge cost to the people of Scotland.
This order is being presented against a backdrop of rising unemployment, and a Scottish economy that is much weaker than the Scottish people want it to be. It is a backdrop of more poverty in many parts of Scotland; a


background of hopelessness and homelessness. All that the Government offer far too many of our people is the prospect of cardboard homes and cardboard hopes.
Inevitably, social work departments face greater demands, even before the community care changes mentioned by the Minister land on their laps in April. According to today's Scottish Daily Record, every hour of every day someone is given a P45. If that is true, it will inevitably lead to greater demands on the housing, education and social work departments of local councils. It is clear that those demands cannot be met within the constraints imposed by the Government.
Why is the Secretary of State setting such devastatingly harsh capping levels? It is plain that he did not secure the agreement of the Convention of Scottish Local Authorities. In 1992, he allowed the resultant budget above grant-aided expenditure to reach 6·5 per cent.; this year, he proposes a mere 2·25 per cent. He has been told that that represents only half the sum identified by councillors of every party everywhere in Scotland as the amount required even to maintain existing services, let alone deal with the numerous burdens newly imposed on them by the Government. Fairness seems to be absent from the Government's proposals, as the Scottish people are increasingly recognising.
Councils now have to address enormous problems in their planning departments as they seek to provide local people with the best possible education opportunities, and to deal with housing problems such as damp and condensation. They desperately want to deal with such problems, but they are being denied the necessary resources.
No one believes that the Secretary of State has preserved the Barnett formula. For every £100 that is being spent, we have lost £1·10. The cost for Scottish local authorities is becoming horrendous. Imagine what local authorities could have done to improve schools, housing, roads, lighting, libraries and so forth if we had maintained the principle of that formula. Those vital matters are not being addressed.
The Secretary of State and the Minister have boasted about consultation. We want concrete evidence that the Government are prepared to listen to what is said to them during those consultations.

Mr. Stewart: I am astonished that the hon. Gentleman should refer to the Goschen-Barnett formula in this context. Aggregate external finance per head of the Scottish population is no less than 47 per cent. higher than it is in England. If the Barnett formula were applied, Government support for local authorities in Scotland would be a great deal less than it is now, not more.

Mr. Clarke: The Minister, and the Government. will have to work hard to persuade COSLA of that. COSLA itself made the point that the Government are providing £16 million less than it asked for road projects, £14 million less than it asked for law and order and protective services, £5 million less than it asked for libraries and museums and £21 million less than it asked for leisure and recreation. Above all, the Government are providing £8 million less than it asked for the urban programme that is so vital now, when unemployment is growing. The Minister has a great deal of missionary work to do if he is to persuade local authorities that the change in the Barnett formula will not apply to them.
What options face local authorities in Scotland? They are some of the most difficult that councils have ever had to face. They are confronted by the possibility of eliminating some services altogether, cutting existing services and even making employees redundant. Lothian council's capping limit for 1993–94 was set at £588·386 million, against which expenditure now stands at £608·034 million: there is a gap of £19·648 million. That is the amount by which budgetary expenditure will have to be reduced if Lothian is to avoid capping.
Strathclyde is having to reduce its budgetary expenditure by over £20 million; Central region is having to find reductions of over £8 million; Fife region is £11·53 million short of the amount needed to maintain the provision of services, even at the current level, without anticipating the demands that will be made next year. Even in Edinburgh, the Secretary of State's case is so weak that the Tory councils have rejected his budget, because they were unable to find the £5 million that he ordered them to find without devastating services to a capital city.
Opposition Members speak with considerable support from all political quarters. Strathclyde's education department faces a proposed cut of some £10·74 million, which is bound to have a devastating effect on provision for schools in the form of teachers, books and materials. The Government will then criticise education establishments for the fact that children are under-achieving, but the blame lies with an Administration who have constantly underfunded education. In that and other respects, the past is catching up with them.

Mr. Graham: May I mention something that really upsets me? A young man in my constituency has an autistic kid, and cannot secure a school place for him because Strathclyde has not enough money to provide places for such children. The Government keep telling us that they are treating local authorities fairly, but they are treating young handicapped folk in a despicable fashion.

Mr. Clarke: As always, my hon. Friend has made his point extremely well.
It was this Government who, in the early 1980s, increased local government funding below the rate of inflation. I was involved in the negotiations that took place then. Let me say, with great respect to the Secretary of State that the Secretaries of State with whom we dealt then may have been a bit more heavyweight, and may have given a little more thought to the subject that he has managed.
The Government's past approach has forced councils to cut their funding. Now, the current Government are faced with the reality of what earlier Ministers have done. Those who were only five or six in the early 1980s but who are now 15 or 16 are paying the heavy cost of the Government's considered but unacceptable policies of that time.

Mr. Stewart: The hon. Gentleman referred to his time with COSLA. He will recall the 1977–78 settlement of the previous Labour Government, when he was vice president of COSLA. The president of COSLA said:
To have been told by the Secretary of State the percentage grant was being savagely cut by 4 per cent. was something none of us expected.

Mr. Clarke: I look forward to arranging a meeting between the Minister and Sir George Sharp, whom he has just quoted. The first thing that Sir George would tell the


Minister is that if we received the same settlement for Fife tonight as we secured that night there would be joy indeed and, to coin a phrase, we would be asking the people of Scotland to rejoice. The Government's settlement falls far short of anything that Bruce Milian or Willie Ross achieved.

Mr. Jimmy Wray: Is my hon. Friend aware that Strathclyde must cut £20 million from its budget? Is not the amount that has been allocated to Scottish local authorities a scandal given that the Government spent £16 million in a weekend on the European summit in Edinburgh?

Mr. Clarke: I do not know whether the Secretary of State will be here later to reply to my hon. Friend's point, but if he is it will be interesting indeed.
The order has been proposed, unlike the period when George Sharp was president of COSLA and I was vice president, at a time of deep recession. Public expenditure should be part of the infrastructure to deal with that serious problem. Proper investment should be made in education and training, in building homes and improving schools and in providing better roads and lighting. There should be a response to the problems within our community, and I am extremely concerned that after April councils will be expected to take up those problems—part of the social security budget, indeed, is being transferred to them—and to exercise the role of enabler rather than provider. But so great are the demands on social work and other departments, especially given the problems of the elderly and of demography, that local councils will not be able to provide the package for community care—home helps and contact with health boards to provide occupational therapy and physiotherapy, which are vital to a strategy for community care. It should be made quite clear that the problems facing councils at the moment, considerable though they are, will intensify because the order simply does not recognise those problems. The work of and demands on local authorities will increase, but their resources simply will not match.
How do the Government respond to people's concern about law and order, which is hardly reflected in the order? Their 1992 manifesto contained a commitment to legislate on offensive weapons but made no mention of water. Today, they are concentrating on privatisation but doing nothing to reassure the community about safety in the streets.
As we consider the order, albeit in a debate that is unacceptably limited, let us be clear that it is a direct attack on disabled people by forcing cuts in home helps and services and on our schools and education by underfunding our teachers. It fails all the people who are afraid to go out or stay in because the Secretary of State has not given the chief constables the resources that they need to tackle crime in virtually every region of Scotland. Today's announcement offers no hope for Scotland's homeless, for our children, for senior citizens or for those without jobs. Today, the Secretary of State had the opportunity to invest in Scotland's local services, in local people and in local communities. He had the chance to invest in Scotland, but his party has no vision, no policies and no support in Scotland. Scotland has no faith in his party or its discredited policies either.

Mr. George Kynoch: I listened to the hon. Member for Monklands, West (Mr. Clarke) and began to wonder whether we were discussing the same figures as I have before me. He stated that he was once vice president of COSLA. [HON. MEMBERS: "President."] I beg his pardon: president of COSLA.
The hon. Gentleman should therefore have read COSLA's briefing paper, which it has circulated to all hon. Members. The first paragraph says:
Having regard to the present rate of inflation, an overall increase in AEF of 3·2 per cent. (4·8 per cent. when Care in the Community funds are added), cannot be regarded as unrealistic",
Yet the hon. Gentleman said that the order is an attack on services in Scotland and, as usual, talked down good news for Scotland—a 3·2 per cent. increase when inflation is 1·7 per cent.

Mr. Chisholm: The crucial issue is not the level of aggregate external finance but the reductions that will have to be made in services because of the penal capping limits. Reductions in services have been proposed for more than half the local authorities in Scotland. Lothian is a classic example, where £20 million is being taken out of the budget. Last year, it was the second lowest spending council per head, not because it wanted to be but because of the inadequate level of support that it was receiving. That is the reality.

Mr. Kynoch: The hon. Gentleman talks about capping. Some councils are obviously overspending. Had they spent more carefully in previous years, they would not be suffering from these problems.

Mr. Worthington: Will the hon. Gentleman give way?

Mr. Kynoch: No, I am going to make progress and talk about expenditure.
Aggregate external finance is 3£2 per cent. COSLA states that expenditure of 2·25 per cent. is permitted within these figures. The Government talk about 2·6 per cent. By my simple arithmetic, if the Government's public expenditure constraints on wage increases of 0 to 1·5 per cent. are observed, overall costs can increase by 2·6 per cent. Wages in local government account for about 60 per cent. of expenditure. If that is true, the other 40 per cent. can incur rises of almost 4 per cent., at a time when inflation is 1·7 per cent., yet the Opposition talk about cuts. That may be simplistic, but simplistic ideas are often the best. If councils were to look simplistically at giving taxpayers value for money, they would give better services.

Mr. Hood: If everything is as rosy as the hon. Gentleman seems to believe, will he tell the House of any local authority in Scotland that is employing extra workers, rather than laying them off?

Mr. Kynoch: The hon. Gentleman should consider my local authority of Kincardine and Deeside which, I believe, intends to increase its staff in the coming year. One could also consider Kincardine and Deeside in relation to another issue, although I do not wish to detain the House because I know that many hon. Members wish to speak. I refer to non-domestic rates.
I very much welcome the fact that we have made a further move towards the rate applicable south of the border. The figures in COSLA's briefing document show


that in 1990–91, the percentage variation between Scotland and south of the border was about 64·6 per cent., but the projection for 1993–94 is only 26·4 per cent. That is clearly a move in the right direction.
Having been lobbied by numerous businesses in Scotland, and only yesterday by the chemical industry there, about concern over the introduction of the uniform business rate throughout the United Kingdom, I believe that the quicker we can make the move to get things level, the better it will be for business.
Let us consider the figures more closely and examine the variances, which average 26·4 per cent. It is interesting to note that Kincardine and Deeside is level with the average applicable south of the border. I believe that the same applies to Shetland and Orkney. Glasgow, however, is about 43·6 per cent. at variance with the rest of the United Kingdom. In fact, the central belt of Labour-dominated councils are all at the higher levels of variance. I suggest that there is a message in that.
Central belt councils, which are largely Labour dominated, must get their house in order and use the funds and opportunities that are being given to them this year wisely and sensibly in the best interests of the ratepayer and the local taxpayer.

Mr. Michael Connarty: It is a strange irony that I am standing on the Floor of the House tonight. I recall sitting in the Gallery 13 years ago when I was leader of Stirling district council. The Government were using the draconian powers of the "excessive and unreasonable" clause to bring down Stirling district council's rate of expenditure nearer to the level that the Government found acceptable.
The Minister might reflect on the fact that after that exercise had been carried out, at the next election the electorate increased the Labour majority on Stirling district council. People in Scotland know what has been happening for the past 13 or 14 years. They know that the Government are intervening to give themselves a majority on every council in Scotland, regardless of the voting patterns and choices of the people. They are doing so in spite of the rhetoric about the people being given a choice and being allowed to assess their councils—

Mr. Gallie: Will the hon. Gentleman give way?

Mr. Connarty: No, I shall not give way. The hon. Gentleman's previous interventions have been appalling and I do not intend to accept one from him.
The Government then were underfunding local authorities, and that is what this order is about—the continued underfunding of local authorities. Throughout the 1980s, local authorities had problems because the Government were placing on them many additional duties, such as those to which my hon. Friend the Member for Monklands, West (Mr. Clarke) referred.
Benefits adminstration was shifted solely on to local authorities without proper recompense. Increased environmental health duties were placed on them without adequate funding. With the passing of the Civic Government (Scotland) Act 1982, the Secretary of State shifted the paraphernalia of unnecessary and unwanted bureaucracy on to local authorities. The conclusions of the Stodart report also placed extra burdens on local authorities for, among other things, tourism.
Every time the Government came up with their rate support grant settlement, as they are doing tonight, they said that they had provided adequate funds. They fiddled the figures and talked about their level of inflation and other levels of inflation, but they did not give adequate funding to local authorities.
In the coming year, local authorities, especially their social work departments, will face the massive burden imposed by community care. It is grossly underfunded. As yet, it is unclear what will happen in one important aspect of the transfer of responsibilities: what payments will have to be made to keep people in residential care? The cost will fall either on the local authorities, which tell me that they do not have the funding and that the revenue support grant does not provide adequate funding, or on the families.
Families might have to pick up the tab for the extra costs of keeping their loved ones in residential care where they are currently being well looked after. At the moment, some of the responsibility for the cost involved falls on the Government, but that will not be the case after the transfer of responsibilities.
Occupational therapy services, even in the region which takes in Kincardine and Deeside, cannot afford enough people to carry out a proper survey of a person's need, sometimes even within six months. For example, they cannot give people a shower because they do not have the physical resources. It has already been said that they cannot supply adequate home help care.
Such problems will continue because the revenue support grant settlement does not take into account the aging of the population. That portion of the population requires more care, but the Government are throwing those people out of the health service's care. I have been told by health board representatives that the welfare of elderly people is no longer regarded as being a health matter but is a social concern. If that is so, the Government should be transferring resources in the revenue support grant settlement to allow local authorities to look after those people properly and give them the social care that they deserve.
Education departments are straining to maintain their morale, and I commend them on remaining motivated. I do not know how they manage it, because they have been burdened with one idea after another. Some ideas have been good, such as the five to 14 proposals. The Minister will know of the burden that has been placed on local authorities by that initiative, but local authorities do not have the resources to make the changes required of them. Many other tasks that local education authorities are being asked to perform, such as testing, are diversions. They need funding to carry out the initiatives at the regional level, to continue to develop standard grades and to continue a commitment to nursery education.
It might be notable that, under the Clinton Administration, there is a proper commitment to the Head-Start programme. The lessons from the previous programme proved that giving a child a proper education as early as possible will bear fruit in the teenage years. Youngsters stay on in education, provide the skills that we need and go on to become the technicians who will develop our future. One hopes that they will be able to pay for the retirement of those who cannot salt away money in a decent private pension fund, as many hon. Members probably can, but rely on state benefits that come from the taxation borne by the new productive industries.
In my region, the cracks are beginning to show. I know of two advisers in the education department who have recently returned to being head teachers in primary schools. They wanted to get out of the advisory service, making it clear that what they were being asked to do was necessary but impossible because of the resourcing and funding from the Government for the very initiatives in which the Government encouraged them to participate and to develop.
In district councils, where I spent 10 years, the staff used to have a vision of leisure and recreation providing an alternative for people who hung around the streets, selling drugs, getting into trouble and doing all the things about which the Government complain. That vision is now very dulled by the mud that has been thrown at it by the Government in many ways, one being a level of revenue support grant settlement which means that local authorities cannot provide the leisure development officers who are required to get young people into leisure centres and make them realise that there is an alternative to hanging about on the streets.
I began by saying that 13 years ago I was in the Gallery when the Government had to use the "excessive and unreasonable" clause to bring down local authorities' budgets. At that time, people could see what an authority stood for when it had a decent level of budget. They could also see what the Government stood for when they reduced each authority's spending with a single order.
Now, it is all done by sleight of hand. Capping is up the Minister's sleeve—he wears a soft glove but there is an iron hand underneath. Local authorities are not allowed to do what the Government said that they would allow them to do, which was to set their budgets, and say to the people, "Elect us if you want to elect us, and put us out if you don't like our budget." The Government have walked away from that promise despite their warm words about the poll tax: they said that everyone would pay and would be individually responsible for choosing the membership of the local authority that they wanted. However, the Government did not want people to choose, which is why they introduced rate capping before the rate support grant order.
The world is now a different place from what it was when Labour were in power. Page 49 of the latest "Scottish Economic Bulletin" shows that in 1980 unemployment in Scotland was 6 per cent. It has gone up and down since then, but has never been below 8 per cent., and the latest figure is 10 per cent. Everyone knows what massive problems that causes for people on social welfare. The lack of jobs causes demotivation among fathers and young people.
There are problems out there, but the Government are not willing to provide an adequate revenue support grant settlement. Let the people choose the level of local authority service and expenditure. The Government are guilty, in the eyes of the Scottish people, for not doing so, as are those, like the hon. Member for Kincardine and Deeside (Mr. Kynoch), who supported them. The expenditure of the hon. Gentleman's local authority is 35 per cent. below the guideline set by the Government. The hon. Gentleman should apologise for that, and the Government ought to apologise for this impoverishing revenue support grant settlement.

Mr. Bill Walker: The hon. Member for Falkirk, East (Mr. Connarty) typifies the difference between the Opposition and the Government.

Mr. Connarty: The hon. Gentleman will recall that when I was the leader of a local authority we had occasion to engage in a debate in Perth. My recollection is that he told young people that they should be grateful for the scab YTS jobs that they were given in Gleneagles. So far as I know, the hon. Gentleman has not served in local government and does not know what it is like to work on the ground to provide people with services, rather than sit here and pontificate.

Mr. Walker: The hon. Gentleman seems to think that the only thing qualifying people to take part in a House of Commons debate on any subject—local government or otherwise—is to have done the job himself. I shall not forget that, as the hon. Gentleman is inclined to speak on many topics of which he has no experience at all.

Mr. Kynoch: Does my hon. Friend agree that one of the qualifications entitling Members of Parliament to speak about local government is that Parliament provides its funds?

Mr. Walker: Yes, indeed. The hon. Gentleman and his friends believe that there is virtue in simply spending money. As has been demonstrated very clearly in Kincardine and Deeside, virtue lies in providing a service at the lowest possible cost to the taxpayer and those who make their 14 per cent. Contribution—or whatever tiny proportion it will turn out to be.
I am rather sorry that the hon. Member for Monklands, West (Mr. Clarke) is not now in the Chamber. I do not say so critically, as we all require sustenance in a long day here. I simply want to say that I am delighted that the hon. Gentleman is back on the Opposition Front Bench, in combative form. I should have liked to be able to say so to his face, rather than in his absence. The hon. Gentleman, like many of his colleagues, has a very selective memory. Opposition Members forget the traumas of the last Labour Government—for example, the problems created by the IMF.
In addressing the problems that face Tayside, Perth and Kinross and Angus district, I remind the Minister of matters that I have put to him and to his ministerial colleagues. I refer to the storm and flood damage sustained in my constituency and in the neighbouring constituency of Perth and Kinross. This matter was referred to also by the hon. Member for Monklands, West. The Bellwin formula, while it is useful in most circumstances, is not the answer in every case. I believe that the River Tay is unique in that the volume of water and the speed at which it moves are greater than in any other river in Europe. The unique problems of the Tay require unique answers.

Mr. Foulkes: I am grateful to the hon. Gentleman for giving way. No doubt, he is keen to be helpful to me, as I arranged for him to reply for the Government in a debate last night.
The hon. Gentleman is making an eloquent plea—I heard him do likewise on the radio—for public funds for people suffering from a natural disaster in his own area. As the hon. Gentleman would expect, I support that stand, since it accords with my philosophy. But the argument that


he is putting forward on behalf of his constituents is out of tune with his own philosophy. In his introduction he said that money does not solve these problems. He wants to cut expenditure. He wants people to stand on their own feet. Why does he think that his constituents who suffered in this way should not have been properly insured, that they should not take care of their own liabilities, that they should not stand on their own feet? Why are they special?

Mr. Walker: As always, the hon. Gentleman is being very selective. I defy him to suggest that I have ever said that public money ought not to be used to meet particular needs. This has been the basis of my whole political career, such as it is—and I was very grateful for the opportunity to make a winding-up speech. The plain fact is that the taxpayer is constantly called upon to contribute towards satisfying specific needs once they have been clearly identified. That does not mean some kind of blanket arrangement, which is why I deliberately used the word "unique" in reference to the Tay. If the Tay were in the hon. Gentleman's constituency, I should still think that the problems were unique.

Mr. Foulkes: In my constituency are the Rivers Doon, Stinchat and Girvan, all of which create problems. The Spey, too, is a very fast river, which creates difficulties. I believe that the hon. Gentleman is stretching a point. My hon. Friend the Member for Monklands, West (Mr. Clarke) put forward a very good argument in respect of a whole range of services, including education and social work, and he referred to the new responsibilities that have been assumed by local authorities. I support the hon. Gentleman in putting forward arguments on behalf of his constituents. Surely he, in turn, ought to support the arguments put forward by my hon. Friend the Member for Monklands, West.

Mr. Walker: Again, the hon. Gentleman has got it all wrong. We are already spending much more than he or his colleagues will acknowledge, but we are not getting the best possible value. Expenditure could be more constructive and more useful and could produce better results. As time is limited, I do not intend to go into detail on that matter.
The Tay requires a special detailed survey—something for which I have already made a plea. Such a project will cost money, but we hope that it will demonstrate how the river could be managed more effectively during periods of spate and flood. The hon. Gentleman seemed to imply that I expect the largesse to extend to everybody who is affected. That is certainly not the case.
However, the Perth and Kinross local authority has special problems. There has been difficulty in my constituency, and there has been substantial difficulty in the neighbouring constituency of Perth and Kinross. The question of the Bellwin formula must be looked at carefully. It is rather nonsensical that one bank of the River Tay qualifies for less-favoured area status, whereas the other bank, which is owned by the same person, does not. That makes a difference to the amount of public money that goes towards repairing the flood banks. The flood banks are there to protect people and property, not for the benefit of any individual.

Mr. Eric Clarke: We are talking about the expenditure of money. The hon. Gentleman wants one-off expenditure on a barrier to ensure that flooding will not

occur again. That is common sense, and in that respect, 1 am with him 100 per cent. However, money spent on patching a road or a roof, rather than repairing it, is wasted. Local authorities are asking for resources to do a multitude of such things. The way that you look at it, public expenditure cuts are sacrosanct. Those are things that you—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order.

Mr. Clarke: I am sorry, Mr. Deputy Speaker; I should have said, "the hon. Gentleman". The point is that we are on your side. We are with you on this one.

Mr. Deputy Speaker: Order.

Mr. Clarke: I am sorry, Mr. Deputy Speaker. I meant that we are with the hon. Member on this one.

Mr. Walker: I thank the hon. Gentleman, but I do not want there to be any confusion about the narrow case that I am making. The situation is unique and calls for a unique answer. I do not want my argument to be seen as a rubber stamp or a blanket authority for across-the-board expenditure.
I drew attention to the fact that the case required a single in-depth inquiry. I agree with the hon. Member for Midlothian (Mr. Clarke) about patching. One of the results of patching on the banks of the Tay and elsewhere, as we know from the experiences of 1990 and 1993, was that the river had its way. Anyone who understands the situation will realise that the water has to go somewhere. The problem has to be properly tackled. There is a great need for an in-depth inquiry if we are to find answers.
I can tell the Minister that if I lived in California instead of North Tayside my neighbours would be delighted to store all that water. They would find a use for it, because there is a dearth of water in California. Some areas of the United Kingdom have recently been declared drought free and, as I said in the Scottish Grand Committee in Edinburgh, when we were talking about what might happen to water authorities, there is plenty of water in North Tayside. If anyone wanted to go there with a bucket or a bowser he could take it away, and it would be free.

Mr. Gordon McMaster: The hon. Gentleman has made a lucid and rational case for investment in the suggested study of the banks of the Tay. The Opposition support his efforts, but I must tell him that a far smaller number of houses in Park avenue, Paisley have experienced flooding over a number of years. The residents of those houses—I believe that there are about a dozen houses—have often had to move out, at substantial cost. I convened a meeting with all the authorities—the district council, the regional council and there was even someone from the Scottish Office—a year ago. Yet those residents are expecting their houses to be flooded again this winter. I shall support the fight of the hon. Member for Tayside, North (Mr. Walker) for the people of Tayside if he will support me in my fight for the far smaller number of people in Paisley.

Mr. Walker: Let me make it clear that I am not talking about simple flooding, which occurs throughout the whole country when rivers rise above their normal level and flood properties, and when there is a backflow from the outflows, or whatever. Such problems must be addressed; I am not ducking the issue. I am talking about what happens when a river is flowing faster than any other river


and with a greater volume of water. The damage done by water moving at that speed is horrendous. Whole farms are wiped away; the topsoil is removed and when the river finally subsides, there is nothing left. That is quite different from the kind of flooding that occurs in many other areas.

Several hon. Members: rose—

Mr. Walker: Other hon. Members wish to speak. I have tried to let in as many hon. Members as I could, because I believe that that is often the only time that Opposition Members get the opportunity to raise their constituency problems. That is why I give way as often as I do.
I want a single body to have the authority to deal with the problems of the Tay sensibly and logically. I know that that will require specific funding and allocations. I hope that the Minister will tell me tonight that the Scottish Office is considering sympathetically my suggestion as a special one-off, unique case, which should be dealt with accordingly.

Mr. James Wallace: As in the past, the hon. Member for Tayside, North (Mr. Walker) has expressed eloquently his case for special funding. I endorse his plea, but when he responded to interventions the hon. Gentleman failed to grasp the point of principle at issue. The facts of nature make the banks of the Tay and its banks the way they are, and that leads to damage to people's livelihoods, farms and well-being. In the same way, the ravages of age and disability, for example, mean that some people need home helps or sheltered workshops. Yet the hon. Member for Tayside, North seems to have a mental block about that kind of local government expenditure. He shakes his head, as if to say no, but he usually seems to approve of such expenditure cuts, which often mean that home helps are not being provided and sheltered workshops are not being built. Those issues inevitably arise in debates such as this.
The hon. Member for Kincardine and Deeside (Mr. Kynoch) said that the Convention of Scottish Local Authorities said that 3–2 per cent. could not be regarded as unrealistic. I believe that the Minister said that the sum was somewhat larger. It was said that, with inflation at 1–7 per cent., that was reasonable. But we are talking about a level of grant that has to last throughout the forthcoming financial year. I do not think that the hon. Member for Kincardine and Deeside could put his hand on his heart and tell us that inflation will still be at 1–7 per cent. next February. According to the Bank of England report today, that would be an optimistic assumption; 3–5 per cent. might not look so rosy in 12 months' time.

Mr. Kynoch: The hon. Gentleman obviously did not hear the rest of what I said. I said that, as wage increases represent 60 per cent. of local government costs, if they were restrained and ranged from nothing to 1–5 per cent., that would leave up to 4 per cent. or even more for other expenditure. That would take account of varying inflation over the coming year.

Mr. Wallace: It may even be optimistic to imagine that inflation will be 4 per cent. in 12 months' time. The hon. Gentleman leaned so heavily on COSLA's comments he should have regard to the fact that COSLA said that

reductions in services were still likely as a result of the settlement. That is because we are talking not about a one-off arrangement but about a background of 14 years during which local government has been asked to cut expenditure.
The Minister said that he expected more efficiency savings, but there comes a time when one cannot save any more. There may be some items in the budget that can still be investigated; perhaps some functions can be performed more efficiently. But the Government have failed to recognise that there comes a time when there is no more fat left; they are eating into muscle. At that point services are threatened. Repairs and maintenance in schools are not carried out, and children have to learn in circumstances and surroundings that are not conducive to learning. In the past, I have tabled questions whose answers revealed the diminishing amounts spent in real terms on school books. When I was at school pupils had a book each. Now it is common practice for books to be shared, which makes homework difficult.
An increasing number of responsibilities have been placed on local authorities. The Minister responsible for industry and local government in Scotland is present, so perhaps he can tell us how many more responsibilities were placed on local government as a result of the Environmental Protection Act 1990. I do not dispute the fact that many of those responsibilities were appropriate, but so often the resources to implement the new responsibilities do not match the task.
There are particular concerns in my constituency. In Shetland the reduction in aggregate external finance this year will be 10·3 per cent., and that follows a reduction last year. Inevitably, that must mean that there will be either a significant hike in council tax, or other local government taxation, or a cut in services. The original brief for the special islands needs allowance contemplated the possibility that it might not continue, so the fact that it is to continue is welcome. We wish to acknowledge that fact, and put it on the record.
One issue involved the resources that the two local authorities in the isles had built up not only as a result of prudent management over the years but from oil-related income. I understand now that while local authorities cannot dip into special funds to meet expenditure, they can do so to defray council tax. People will ask why local authorities which have been prudent in the past, and which have managed to build up special funds, should be expected to use those funds because Government have not provided sufficient to them otherwise to meet their responsibilities.
The hon. Member for Monklands, West referred to non-payment of the community charge. I share the views of Conservative Members that those who went about encouraging people not to pay their community charge did considerable damage to local government in Scotland. Those who have to bear the cost of that through the subsequent increase in community charge are the honest, law-abiding citizens who pay their tax and those who suffer because of services not being provided.

Mr. Maxton: I agree with the hon. Gentleman. I never argued in favour of non-payment campaigns. But if the whole responsibility for non-payment of poll tax was placed on those who propagated that idea, it would be


misleading. The tax was uncollectable from the start. The problems were built into the tax and it should never have been introduced.

Mr. Wallace: That was partly recognised because 100 per cent. collection was never expected. Various factors were involved. The mobility of people was much greater than anyone had imagined. Also, in some cases it was not a matter of "can pay, won't pay" but that people could not afford to pay the tax.
The Minister knows that I am a fair person and will take the rap if I am wrong, but I understand that if a person does not pay, for whatever reason, and if that person would have been entitled to a rebate, the Government do not pay the amount of the rebate to the local authority.

Mr. Foulkes: It is a double whammy.

Mr. Wallace: It is a double whammy, perhaps. The local authority is not getting the money from the individual; in addition, it is not getting the money which it would have got from central Government if the person had paid the tax. In the first nine months of this financial year almost £0·5 billion of community charge is unpaid. The Government contribution relevant to that could be a sizeable amount. Perhaps the Minister could indicate how much he estimates the Government have saved because people have not paid their poll tax. Local authorities would be interested in knowing the amount by which their resources would have been increased if the Government had paid their share. The Government could pay, but I think that they, too, are adopting the line of "can pay, won't pay".
The problem in local government finance is that, because of the gearing effect, almost 90 per cent. of council spending is determined by central Government. If a local authority wants to incur expenditure, the impact is proportionately very high on the council tax and, because of the capping powers of the Secretary of State, the amount of discretion afforded to local authorities has become less and less.
We believe in the system of local government finance based on a person's ability to pay. In that case there would be scope to increase the local base for raising revenue. If Ministers are sceptical about that, it comes ill from a party which at the last three general elections gave tax bribes to ensure that it would win. We believe in a simple proposition that may be too radical for the Government. Local government finance should be arranged in such a way that local authorities, elected by local people to make decisions in respect of the local community, should be accountable to the electorate for those decisions, including decisions on spending. That proposition is perhaps too radical for the Government, but it would enhance the quality of local authorities throughout Scotland.

Mr. Phil Gallie: I wish to comment first on the remarks of the hon. Member for Monklands, West (Mr. Clarke), who refused my second intervention. I do not criticise him for that; he was good enough to allow me to intervene once.
The hon. Gentleman listed matters for which he thought a Scottish assembly should be responsible. Some Opposition Members have suggested that a Parliament would be more in line with their views, but I will comment

on that later. The hon. Member for Monklands, West suggested that education, roads, social services and planning should fall within the remit of a Scottish assembly. Those services are all looked after by local authorities. The hon. Gentleman seemed to be offering devolution in reverse by passing to the centre responsibility for issues already catered for locally.

Mr. Foulkes: The hon. Gentleman shows a lamentable ignorance of the proposals. The proposals are for devolution of legislative powers for education, housing, local government and so on. The proposals are for devolution of the legal framework for those services, not their administration. Administration would remain, as at present, with local government. The hon. Gentleman shows a fundamental lack of understanding. He displays an ignorance which shows us why he does not understand anything about Scottish devolution.

Mr. Gallie: I am not sure what I am not supposed not to understand. Is it the policy for a Scottish convention? Is it the policy for a Scottish assembly? Is it the policy of the Labour party that I am supposed to know about? Is it the policy of the Liberals, or that of the Scottish National party? Each of those groups has different ideas. They are a hotch-potch; they are crazy ideas. The hon. Gentleman is trying to kid us if he makes out that there is some structure that we should all be aware of.

Mr. Foulkes: rose—

Mr. Gallie: No, I am not giving way. The hon. Gentleman had his opportunity.
As the hon. Member for Monklands, West said, the vote at the last election suggested support for Scotland's place within the Union and support for an assembly. There are two interpretations of the consequences of that vote. The hon. Member suggested that 75 per cent. of the population voted for a Scottish assembly. My interpretation is that 78 per cent. of the population voted for Scotland's place within the United Kingdom. I strongly believe that the parties of the Union must take on board the fact that an assembly would be nothing more than a stepping stone to the break-up—

Mr. Deputy Speaker: Order. I have listened patiently, but I have not heard much about local government. Will the hon. Gentleman please get back to that subject?

Mr. Gallie: I accept your ruling, Mr. Deputy Speaker, and I shall come back to the topic. I was simply trying to pick up points raised by the hon. Member for Monklands, West.
The hon. Member for Falkirk, East (Mr. Connarty) criticised Kincardine and Deeside for spending at below Government limits. Voters in Kincardine and Deeside elect local councils to do just that. They fully recognise that the community charge that they have to pay relates to council expenditure. Obviously they do not favour paying high community charges, so they elect councils that are financially responsible. Instead of criticising that council, hon. Members should commend it.
The hon. Member for Falkirk, East also suggested that Labour party policies served people especially well in Stirling district. My recollection—I stand to be corrected—is that Stirling district is now a Conservative-run council.

Mr. Maxton: It was decided on the toss of a coin.

Mr. Gallie: As it was when Labour ran the district.
The revenue support grant has three elements. The first is aggregate external financial support—RSG and business rates combined—which totals £5.165 billion. As the Minister suggested, the figure for Scotland is 47 per cent. higher than the equivalent figure for England. The total allowable expenditure for local authorities in the coming year is £5·8 billion. That means that the council tax has to make up the difference of £6·35 million, which is 11 per cent. of the total expenditure of local authorities. The Government have thus been very generous to the new council tax payers. I suggest that that is far fairer than the demand when the community charge was introduced. Payments then were based on a 14 per cent. contribution.
If some of the new ideas for the introduction of the council tax, which is about to descend on us, had been introduced with the community charge, we might not have had to make the change. [HON. MEMBERS: "Like what?"] Like what? We do not now demand 20 per cent. payments for those on benefit as we did for the community charge. The 20 per cent. banding payment has been removed for the new council tax. It was almost certainly a mistake to look for payments on a per head basis without tying payments to the point of abode and without looking for a collective payment from that door. Such lessons have been learnt only in retrospect, and I regret that.
In the coming months, many who will be asked to pay the council tax may regret the passing of the community charge. They have been the silent members of the community until now.
I have said that council tax payments will be 11 per cent. of total expenditure. I also see figures between £200 million and £250 million, which will almost certainly come from the rebate system, especially as the 20 per cent. banding will be removed. That means that only 7 per cent. of local authority funding will be paid directly by council tax payers.

Mr. Maxton: I accept what the hon. Gentleman is saying about council tax rebates. The real problem with the discounts for council tax payers is that that cost will not be borne by central Government: it will be borne by the other council tax payers in the area. There may be a fair number of second homes, which have a 50 per cent. discount, in the hon. Gentleman's constituency. That 50 per cent. discount will be paid for by the hon. Gentleman and his constituents, and not by central Government.

Mr. Gallie: I do not believe that there are many second homes in my constituency, so the problem does not really arise. I recognise, however, that, in many areas—especially in the constituency of the hon. Member for Cunninghame, North (Mr. Wilson)—second homes were a problem when the community charge was introduced. Therein lay another problem with the implementation of that charge for local authority services.
Another problem arose because the Government were not prepared to cap local authority spending on the introduction of the charge. In effect, that meant that local authorities spent beyond reasonable levels and blamed the Government and the community charge for the high cost to the community charge payer. I am pleased to note that the Government have learnt that lesson in time for the introduction of the council tax.

Mr. Hood: It is a roof tax.

Mr. Gallie: A roof tax was something that was in the Opposition's minds. I hold no brief for property taxes, but I believe that the council tax is the best of such options, and I support it on that basis.
Let us look once again at the rate of revenue support grant in the current year. I must draw attention in particular to the added injection of the community care allowance—some £63·5 million. I welcome the community care ideal, as do most people in the community, but I ask my hon. Friend the Minister to take careful note of what I have to say. I understand that there may well be problems of ring fencing in Scotland, but it is important that the new cash injected finds its way into the community care programme. I seek my hon. Friend's words of comfort on that.

Mr. Chisholm: The hon. Gentleman speaks highly of the community care settlement. Does he realise that a study by Lothian region shows that, throughout Scotland this year, there will be a £9·5 million care gap between the amount of money given and the amount that will have to be paid for services? Does he further realise that, when all clients are covered by local councils, that care gap will widen to £63 million? A £9 million care gap would add £5 and a £63 million gap £40 to a band D council tax payer's bill. Surely the settlement is somewhat inadequate.

Mr. Gallie: The hon. Gentleman's comments do not surprise me, especially as they are based on the findings of Lothian regional council. In my experience, whatever aspect that body is considering, it always envisages a need for more money.
The allowances give a 3·2 per cent. increase across the board—above the rate of inflation�žto local authorities. If one adds in the community care component, as my hon. Friend the hon. Member for Kincardine and Deeside (Mr. Kynoch) suggested, that raises the level to 4·1 per cent.
One important issue seems to have been ignored in the documents, and that is the effect of falling interest rates. Will my hon. Friend the Minister address that point and advise me what benefits local authorities will achieve as a result of the fall in interest rates that we have experienced, especially in the past six months? I do not think that the papers take account of that fall, which I think will place extra money in the councils' coffers.
The Convention of Scottish Local Authorities document refers to the non-collection of the community charge. In that respect, I am pleased to identify myself with the words of the hon. Member for Orkney and Shetland (Mr. Wallace), who referred to difficulties that were initially encouraged by Opposition Members when the community charge was imposed. People were encouraged not to pay, and inevitably the collection rate fell. The situation got worse. In the first year, there was a 12 per cent. non-collection rate, which fell to 18 per cent. in the second year and 20 per cent. in the current year. That is changing, because people are being pursued. I should like the Under-Secretary of State to give me some assurance that those who have deliberately avoided paying the community charge will be pursued until every last penny is paid into the coffers of the local authorities which are entitled to that cash.
I pay tribute to the council of the Western Isles. Last week, I was privileged to visit the Western Isles with the Select Committee. I was most impressed by the attitudes of the councillors. I expected to hear complaints and whining


about the problems of the Bank of Credit and Commerce International, but I heard nothing but positive views. I understand the problems which the councillors face. I would ask the hon. Member for Western Isles (Mr. Macdonald) to return my good wishes to the councillors. I trust that they will do well in the coming year with the rate support grant.
I should like to refer to the new administration of the Kyle and Carrick district council. That council inherited an horrendous budget. The previous council had overspent, and the budget was totally out of control. The new council did not wait until the rate support grant announcements were made to take action; it tackled the issue from the day it was elected in May 1992. It has made good progress.
I believe that the Under-Secretary of State will have no worries at all in having to cap Kyle and Carrick district council. That would not have been the case if another party had been in control of the council.

Mr. McMaster: I remind the hon. Gentleman that two councils look after the people of Kyle and Carrick—Kyle and Carrick district council and Strathclyde district council. The hon. Gentleman is trying to convince us that the revenue support grant settlement is generous. Can he tell us what he will say after 1 April to the people in his constituency who will lose home helps as a result cif the settlement?

Mr. Gallie: I would need to examine closely the budget of Strathclyde regional council. When I find that the regional council can spend £500,000 on a campaign against changes in the water structure, and when it publishes glossy magazines and information on 29 January —the date that the consultation period closes—I must examine the budget. There must be a lot of money in the coffers which the regional council can use to the better advantage of those who pay the community charge and will pay the council tax. At present, that includes people in Kyle and Carrick district but, hopefully, they will not be included in the not too distant future because they will have a single tier authority.
It does not matter what level of rate support grant the Secretary of State announces—Opposition Members will never be satisfied. They always look for increased expenditure. Tonight, it is local government; tomorrow, it will be health, social security, third-world aid or the arts. They will want to spend more. I am delighted with the settlement, and I compliment my hon. Friend for producing it.

Mr. Eric Clarke: I had 16 years as a councillor on Midlothian county and regional councils. I fought against the then Secretary of State for Education, Baroness Thatcher, when she stole the half-pint of milk from children. That is going back a bit. More than that, I stood out against the Callaghan cuts, so I am consistent.
I am not standing here simply to talk about policy. IL am interested because the decision which is taken today will affect the quality of life of thousands of people in Scotland. I am sure that everyone is interested in that. The sacrosanct idea of Conservative Members that public expenditure cuts are marvellous is irresponsible. The cuts do not save money: they cost money. The hon. Member for Tayside, North (Mr. Walker) wants to spend money to

save the inconvenience of his constituents. I would support you in that. But there are many other ways throughout Scotland of doing exactly the same. The spin-off of that would be the creation of jobs. I am saying to you that civil engineering jobs—

Mr. Deputy Speaker: Order. The hon. Gentleman must address the Chair.

Mr. Clarke: I apologise, Mr. Deputy Speaker. I cannot get out of the habit of being reasonable and speaking proper English, but I shall try my best: bear with me.
The Government's short-sighted policy costs us all money eventually. There is a backlog of work needing to be done. Let the Minister just visit some of the schools that I used to visit years ago. He will see paint peeling off the walls and windows that need to be replaced, which could have been painted. It is the old saying about the tar on the ship—penn'orth of tar. Now roofs will have to be repaired rather than patched.

Mr. Gallie: The hon. Gentleman suggested that Conservative Members were responsible for the maintenance of schools. I suggest to him that the responsibility is with the local authorities. They had the cash to manage properly. The problem lies in the fact that they have not managed their affairs in a reasonable manner.

Mr. Clarke: When I was a councillor, we stood by an increase in the rates and people had the opportunity of voting us in or out. We had the autonomy. Now there is direct Government interference. There was no capping then. We stood every three years and were either elected or not elected. What was wrong with that? The expenditure was either frivolous or otherwise. I assure the hon. Gentleman that it was not normally frivolous. We prided ourselves on running our authority well. So do local councillors now.
The hon. Member for Ayr (Mr. Gallie) said that local authorities had the cash and could do this and that. That is not so. There is direct interference from St. Andrew's house. That is why we want a Scottish Parliament. We want to take power away from the individuals in St. Andrew's house and give it to a democratic body.
One of the cruellest ironies is that, although buildings can be repaired and things put back, we cannot give back to children the proper education that has been taken from them.

Mr. Gallie: indicated dissent

Mr. Clarke: The hon. Member for Ayr shakes his head. All I can say is that it might rattle now and again.
The position is a fact of life. It is serious because youngsters are being deprived of a proper education. The remedial aspect of education which my hon. Friends mentioned earlier is being damaged, and opportunities are being removed, from young handicapped individuals. Such things cannot be replaced later. Young people cannot be repaired as buildings, roads and so on can be repaired. I ask the Government to reconsider. I know that I am talking to the deaf. The people of Scotland are getting to the stage where they want and are willing to pay for a quality of life. "Public expenditure" seems to be a dirty phrase, but it could be used to give people back some employment.
Expenditure will be required for sewers, maintenance, barriers on the Tay or an injection of cash into my


constituency of Midlothian. That work must be carried out, and this is the time to do it. The Government pride themselves on being business men, but if they were they would get the best tenders now while there is a dearth of work. That is common sense.
I hope that people are watching and listening to our arguments. I am not here to score points against anyone, because the situation is far too serious to be funny. My constituents' quality of life will be affected if we deprive local authorities of money, and I have repeated that fact because it is so important.
How many of us have seen homeless people turn up at our surgeries? What can we do for them? I am not a super-councillor but a Member of Parliament, and I refer them to the local authority, which has a list of homeless people, many of whom are unemployed builders who could build homes.
The problems that we all face every day are too numerous to mention. Are not our people entitled to the quality of life that they deserve? They are unemployed through no fault of their own. The Minister cannot say that we are a poor country—we are a very wealthy country, but the wealth happens to be in the hands of too few people. Opposition Members want that wealth to be in the hands of many people.

Mr. Chisholm: Since my hon. Friend and I represent constituencies in the Lothian region, does he agree that, although there is a general problem with finance, the region has a particular problem, as it receives less per head than any other region of Scotland—last year it was £708 per head, and it will be less this year? Does he also agree that the result of inadequate central Government funding is that Lothian services are not what they were when he was a councillor, when they were the best in Scotland? Expenditure per head is now the second worst, because the region is not getting enough from the Government.

Mr. Clarke: I agree. We seem to be being penalised for having had the audacity to vote Labour. One aspect of the problem is the way in which the formula is worked out by the Secretary of State for Scotland and others. The Government have never got over the shock that Edinburgh is Labour-controlled, and they have never forgiven us for it. The people of Edinburgh and the Lothians are suffering for that. That is my view, and the Government can respond to it, or not, but it is a fact of life and the only logical reason. Why is the formula different from anywhere else?

Mr. Wallace: Does not the hon. Gentleman accept that, in last year's district elections, far more people voted Conservative than Labour in Edinburgh? How does he square that circle?

Mr. Clarke: Edinburgh is still Labour-controlled. Sometimes people vote in a daft way when Governments penalise them and hit their pockets. That is what the Government tried to do on that occasion. They may be succeeding, but I am sure that they will not pull the wool over everyone's eyes, and that people will realise what is going on.
I am making a plea for all those people who are employed by local authorities and who are doing their best. Because of the balance of budgets, they do not know

whether they will keep their jobs and the threat of redundancy hangs over every one of them. Many have worked for the authority for years and are very dedicated, working outwith the ordinary nine-to-five job. We depend on them.
Many other people wonder about their future quality of life and ask themselves whether it is worth staying in local government or whether they should move on. That is true of teachers, who are asking themselves whether it is worth it. We depend on a well-educated new generation, who have been looked after in properly maintained schools and other institutions, and we must give them confidence. Those cuts and clawbacks do not help local authorities or those who are unemployed.

Mr. Gallie: indicated dissent.

Mr. Clarke: The hon. Member for Ayr can keep shaking his head, but I know that what I am saying is right.

Mr. Gallie: rose—

Mr. Clarke: No, I shall not give way as I shall be finishing my speech in a minute.
I hope that common sense prevails regardless of the fact that the Government believe that their policy of cutting public expenditure is sacrosanct.

Mr. Gallie: rose—

Mr. Clarke: No, I shall not give way. I am going to sit down as I have finished my speech.

Mr. Andrew Welsh: We have just heard the genuine voice from the heart of Scottish local government. Among Opposition Members there is a tremendous depth of experience of and expertise on local government. I hope that the Minister is listening to what is being said. I can definitely identify with many of the issues raised. Having served in a local authority, I know of the expertise and dedication of the highly trained councillors and officials who work in local authorities. Those people supply a massive range of services daily throughout the length and breadth of Scotland.
It is an absolute shame, and almost criminal neglect by the Government, to fail to understand either what local authorities are doing or the true worth and position of those authorities in Scotland. I would rather see those local authorities given greater autonomy and the resources to carry out the services to the best of their ability. I have never seen a Government who have understood that and allowed local authorities to make their contribution to Scotland.
The revenue support grant order confirms the general trend in the Government's handling of local authorities over the past decade. Successive Governments have consistently hogtied local government with more statutory obligations, while refusing to provide adequate resources, powers and skills for genuine local authority action.
The Government's view is that local authorities are simply enabling organisations, with little or no ability to act independently. That is the sum total of Government policy, and shows the direction in which they have been heading over the past decade. Now, the Secretary of State wants to determine 89 per cent. of all the income that is available to local authorities for annual expenditure. If we ally that to the Government's capping proposals, we are


left with democratically elected Scottish local authorities with virtually no discretion over service provision and absolutely no discretion to expand local services to meet local need.
One major problem is that local authorities know the need but are frustrated, as they do not have the ability to meet it. They have the expertise to do so, and central Government's job is to give local authorities the tools to allow them to provide services at the levels that they know are required locally.
During the past seven years, central Government financial domination has risen from 32 per cent. to 75 per cent. in my local authority. That pattern is repeated throughout the length and breadth of the country. That means that there is little or no scope for truly local action or discretion. Under the Government's clear centralisation policy, local authorities are gradually being reduced in status to the level of non-elected health boards. They are organisations that are given fixed budgets determined solely by central Government, who simply cut spending to suit their budget levels, irrespective of local need.

Mr. Gallie: The hon. Gentleman suggests that central Government have taken more and more control over the affairs of local authorities. I acknowledge that, if central Government cap local authorities, the hon. Gentleman's argument has some merit. However, the way that local authorities administer their affairs does not allow for central involvement. I asked my right hon. Friend the Secretary of State to ensure that local authorities provided nursery education to reasonable levels; he said that it was a local authority matter, and that he could not intervene.

Mr. Welsh: Compulsory competitive tendering, capping and these orders all show that the hon. Gentleman's remarks are nonsense. We oppose the quangofication of Scottish local government tooth and nail. Local authorities which know local conditions should be allowed maximum autonomy to meet local need—because they understand it. Then it is up to the local electorate to decide whether they like or dislike the way in which these democratically elected local councillors have run the affairs of the local authority.
There can be no denying that the imposition of central Government legislation—a flood of it—has badly affected local authorities over the past decade. I want that trend reversed, to allow more decision-making power to be devolved to local authorities, allowing them to make decisions on behalf of their electorates and in the light of their needs.
Local authorities are an essential part of the democratic structure of society. They can and should offer people the right to participate democratically in local decisions affecting local communities. I do not want any more quangofication—I dislike the system that ensures that health boards, for instance, are packed with Tory placemen carrying out Government policy with no mandate to do so. We should encourage democracy in Scotland—precisely what the Government are not doing—

Mr. Calum Macdonald: What on earth is "quangofication" in Gaelic?

Mr. Welsh: I could not say, but perhaps the hon. Gentleman can help us.
Under the Government's system, spending is unrelated to actual need and there is limited scope for local discretion. If it is to be meaningful, democratically elected local government must be able truly to reflect local wishes, priorities and needs. That requires an ability to raise and target funds according to the wishes of an electorate. Everything in these orders runs directly counter to local democracy. Central Government now fund and cap local authorities, and they are turning Scotland's local authorities into nothing more than local administrative units.
I do not want local authorities to become just enabling administrators. I want them to be service providers, understanding local needs and meeting them. If the Government complete their local administration ideas, the democratic system will be the loser. The SNP opposes Tory centralism and believes in maximum local authority autonomy and decision making.
I should like to ask Labour party Front-Bench spokesmen to make their views clear. The right hon. and learned Member for Monklands, East (Mr. Smith) seemed, in his Bournemouth speech, to set Labour on a course to chase south-east English voters—expressing the very Tory philosophy which sees local authorities as enablers, not as service-providing organisations. Does the Labour party see local authorities merely as enablers or as positive service providers?

Mr. Adam Ingram: The hon. Gentleman talked about local authorities being able to raise funds to spend on local communities. How does he square that with the SNP campaign in favour of non-payment of the poll tax? There was still a need to ensure that funds were collected to meet the essential needs of the community.

Mr. Welsh: Had it not been for that campaign, we would still be stuck with the poll tax.
I repeat my question to Labour Front-Bench spokesmen. If they are to begin chasing south-east English votes, some of their fundamental policies may have to be ditched. If the Labour party will not clarify its position, all Labour Members' words in support of local authorities tonight—I agree with them—will be meaningless.
The SNP is absolutely sure of the importance of a democratic role and of independence for local authorities. I am sure that the electorate will want to know whether Labour has changed its views.
In conclusion, I should like to highlight the unfairness of the non-domestic rating system in Scotland. Scottish businesses and industries are still I 1p in the pound adrift of their English counterparts in this respect. So much for extra taxation under a Scottish Parliament. We already have extra taxation, because of the situation that the Government have allowed to exist for decades.

Mr. Kynoch: The hon. Gentleman said that Scotland was I 1 p worse off than England. Obviously he did not listen to my earlier remark that Kincardine and Deeside is exactly on the average that exists south of the border. It comes down to good management by good councils.

Mr. Welsh: The exception proves the rule, but the solution is in the Government's hands. They could create a level playing field for Scottish commerce and business now, but they are talking of some future date. May we have an assurance from the Government that Scottish business will enjoy a level playing field next year? Scotland


will pay £312 million in extra costs in 1992–93. That means job losses and higher prices to Scottish consumers, which should not be allowed.
The hon. Member for Kincardine and Deeside (Mr. Kynoch) is the first to say that Scotland would suffer extra taxation, but I do not hear him say very much about the extra taxation that it has suffered for decades and is suffering now.

Mr. Kynoch: Does the hon. Gentleman realise that the order gives extra funds in respect of non-domestic rates, so that the differential will be reduced? The Government are already moving very fast in that respect. The differential is now only 26 per cent.—and earlier, I asked the Government to speed up that process.

Mr. Welsh: The Minister spoke about the order producing savings, but not about actual costs—which are far greater as a result of the unfair rating burden, which exceed by far his so-called savings. I ask the Minister to achieve a level playing field. Business must be hindered and jobs lost by Strathclyde's 43.5 per cent. rates disadvantage. It is all very well speaking about Kincardine and Deeside, but I want that unfair burden to be removed from the whole of Scotland.

Mr. Connarty: Does the hon. Gentleman realise that Kincardine and Deeside expenditure is 35 per cent. below the guideline? That local authority spends 35 per cent. less than the Government think it should to provide a standard level of service. Is the hon. Gentleman suggesting that Scotland should take a 35 per cent. cut to achieve the level cited by the hon. Member for Kincardine and Deeside (Mr. Kynoch)?

Mr. Welsh: I am not advocating any cut. If the hon. Gentleman will listen to the rest of my speech, he will learn that I am advocating that expenditure in Scotland should match the needs in Scotland. However, I take his point that Conservative-controlled Scottish local authorities, few though they may be in number, keep rates low by destroying services.
The answer is to improve services and to keep rates low. I commend to the House the actions of Angus district council, which always has the lowest rates in the whole Tayside region while massively increasing services—something that the Tories could never manage when they ran Angus. I believe in value for money, and I take the hon. Gentleman's point in that regard.
The increased tax burden on businesses in Scotland is the price paid for Scotland's outdated union with England.

Mr. Bill Walker: Will the hon. Gentleman confirm the value of the local authority's reserves when it changed from Conservative to Scottish National party control, and how they were used to keep rates low?

Mr. Welsh: The reserves were wiped out by the Tories trying to get themselves re-elected. The SNP in Angus district inherited zero reserves—that was the state of play. The Tories were absolutely disastrous at running local authorities. The Minister has a cheek pretending that value for money is always achieved by Conservative authorities. That was certainly not the case in Angus.
When the SNP took over, Angus had the fifth highest average rents in Scotland. Under SNP control, as the

documents that we shall examine later show, it now has the second lowest average rents, with a massive increase in services and good value for rent payers.
The sooner that unfair business rates are wiped out the better.

Mr. Maxton: Will the hon. Gentleman allow me to intervene?

Mr. Welsh: No, I want to finish, because other hon. Members hope to catch your eye, Madam Speaker.

Mr. Maxton: rose—

Madam Speaker: Order. The hon. Member for Angus, East (Mr. Welsh) said no.

Mr. Welsh: The hon. Gentleman can make his own speech.
This year, a £312 million bill will be imposed on Scottish business and employment—and that is too high a price to pay for an outdated Union. The sooner that Union is abolished, the better.

Mr. George Foulkes: Having sat through every minute of this interesting debate, I am glad to have the opportunity of saying a few words. I spent nine happy years in Scottish local government, along with my hon. Friend the Member for Midlothian (Mr. Clarke): we both served on Lothian regional council. I congratulate my hon. Friend the Member for Monklands, West (Mr. Clarke) on his excellent speech; I remember when he was a distinguished president of COSLA.
My hon. Friend the Member for Midlothian said that, when he and I worked in local government—Labour was then in office at Westminster—we did not get all that we wanted. Of course, under any Administration, local government does not receive everything that it requires. I can assure the House, however—from my COSLA experience, and, in particular, my experience as chairman of Lothian's education committee—that those were halcyon days compared with what we are now experiencing.
In those days, we were expanding community schools in Lothian, with the encouragement of the Labour Government. We were expanding nursery education. We saw the prospect of doing even more: I looked forward to taking over some of Edinburgh's private schools, for we were certainly working in that direction. We shall do so again, once we regain power at Westminster.

Mr. Stewart: Will the hon. Gentleman give way?

Mr. Foulkes: The Minister will be allowed to reply to the debate, if he behaves himself.
Over the past 14 years; local authorities have been squeezed, cut and capped. That has meant a major reduction in services to the most vulnerable members of society. The sons and daughters of Edinburgh's judges do not attend local authority schools; they attend private schools, so they are not worried. Our children, however, attend local authority schools, and experience the cuts. They know that books are not available as they used to be.
We also see the effect on employment. The Government really are astonishing: they stand back in amazement, saying, "My goodness, the level of unemployment is rising", as though that were nothing to do with them. In


fact, the increase in joblessness—in industry as much as local government—is a direct result of the squeeze on expenditure that the Government have imposed. They say that they are as concerned about unemployment as Opposition Members, but theirs are crocodile tears. It is the Government who ensure that that employment comes about.
We have heard a good deal of special pleading today. I agreed with the special pleading of the hon. Member for Tayside, North (Mr. Walker); I hope that he will agree with mine, but I am not sure that he will. Earlier, I asked a question about Cumnock and Doon Valley, which I make no apology for repeating. The area needs special consideration, because of the high level of unemployment. Cumnock and Sanquhar travel-to-work area, for instance, has a higher unemployment level than any other travel-to-work area in Great Britain. As my hon. Friend the Member for Monklands, West pointed out, the area has a special need for employment creation and regeneration, but the work that it wants to do has been held back by the threat of capping. Moreover, it has now been forced to increase charges to private industry for dealing with such matters as trade waste. That extra burden is creating problems for the few industries that remain in Cumnock and Doon Valley.
The hon. Member for Ayr (Mr. Gallie), in a remarkable, indeed unbelievable, speech—actually, having got to know the hon. Gentleman, I did not find it so very unbelievable—spoke of all the needs of local government; or, rather, he said that local government had no needs. He said that local government had enough money, and even implied that it had too much.

Mr. Gallie: Will the hon. Gentleman give way?

Mr. Foulkes: I have not even said anything yet. I know that he is very sensitive, but he should wait until he is attacked before he tries to intervene.
The hon. Member for Ayr goes to Castlehill primary school in his constituency—

Mr. Ingram: He is too old for that.

Mr. Foulkes: He might go along from an educational point of view, but he goes from a constituency point of view and says that he supports its fight, but he does not support the regional council's demands for money for repairs. He says that Strathclyde council is profligate and that it spends money on other things. Of course it does. It spends money on police, fire prevention, water, sewerage and all the social services. Conservative Members demand those services, but they will not will the resources.

Mr. Gallie: The hon. Gentleman refers to Castlehill school in my constituency. My complaint about Strathclyde is that it has not planned a reasonable closure programme over a number of years. Originally, Strathclyde planned to rebuild Castlehill, but in January it suddenly decided to close it. That is atrocious management. That is the problem.

Mr. Foulkes: The hon. Gentleman fails to understand that Strathclyde does not have control of its revenue or capital budget. It is inhibited by Ministers failing to provide the capital and revenue. The hon. Gentleman stands up in his constituency and says that he does not

agree with the Government and that he will protect the interests of his constituents, but comes here and goes through the Lobby—

Mr. Gallie: On a point of order, Madam Speaker. It is wrong to say that I say all these things in my constituency. I should like evidence of it—

Madam Speaker: Order. That is a point of argument, not a point of order.

Mr. Foulkes: Sometimes we wonder whether the hon. Gentleman represents Ayr or Scottish Power.
There are many more arguments that I could deploy about community care, the aging population and so on, but I shall not do so because I know that my hon. Friend the Member for Fife, Central (Mr. McLeish) will deal with them. What sickens me is the hypocritical attitude of Conservative Members who always want services but are not prepared to ensure that they are paid for. That brings discredit to politics. The people of Scotland have realised that and it will not be long before the people of the rest of the United Kingdom also do so.

Mr. Calum Macdonald: I congratulate the hon. Member for Ayr (Mr. Gallie) on one aspect of his speech, in which he acknowledged the special difficulties and problems of the Western Isles and the council's struggle to meet those difficulties. I acknowledge that the Government have taken those problems on board to some extent by reinforcing their commitment to the special islands needs allowance. Like the hon. Member for Orkney and Shetland (Mr. Wallace), I welcome that repeated commitment and hope that it continues.
The special needs of the Western Isles are based on its special geographic character and its rural nature. The population is sparsely spread over a large area. Thal presents the council with particular problems in trying to meet the usual responsibilities and leads to additional costs. Although the Government have acknowledged that through the special islands allowance, there is still some way to go. The revenue support payments need to be reconsidered to ensure that all the islands' special characteristics are taken properly into account.
I mentioned the geographic distribution and sparsity of the islands' population. The Minister will be aware that those factors lead to special communication problems which in turn lead to additional costs with which the council must grapple. Since the Braer disaster, no one can be under any illusions about the desperate nature of the climatic conditions that the island communities have to face, especially during the winter. Once again, they lead to special difficulties with which the island authorities in the Western Isles and in Orkney and Shetland have to deal. Dealing with those problems also involves additional costs.
When the Western Isles council was formed, it inherited a particularly low service base but it has done remarkably well in building council houses and in developing the roads programme and the transport network in general, in building links with the smaller islands in the island chain and in generally developing the provision of services throughout the islands. Inevitably, that has led to high capital costs, and because much of the provision has been made recently, it has led to the need to service the resulting


debt. That is another special factor affecting the Western Isles council which the Government must take into account.
I am grateful that the Government have accepted the recommendations of Touche Ross to maintain the special islands needs allowance. It is absolutely essential for the Western Isles and for the communities of Orkney and Shetland. I should be grateful if the Minister could say that he has a long-standing commitment to that allowance and that he recognises the recommendation of an independent report that it is a much needed supplement to the revenue that central Government otherwise provide to the islands authority. I am sure that such a commitment would also be welcomed by the hon. Member for Orkney and Shetland.
Finally, I shall deal with water and sewerage costs. For the Western Isles, such costs represent a great financial burden. As the Minister will know, the problem is that the costs are supposed to be self-financing. In addition, the money raised from individuals within the communities is not subject to any rebate. Therefore, in an area such as the Western Isles, which has high water rates and is expected to have even higher rates in the future, the poorest members of the community face the most crippling bills. Will the Minister seriously consider that issue? He may not be willing to countenance the prospect of providing additional resources for the islands' authorities to deal with their particular water and sewage costs, but will he accept the case for introducing into the water rate a rebate similar to that available under the council tax to the poorest members of the community? I look forward to his reply.

Mr. Henry McLeish: As is usual when we are dealing with such matters, this has been an interesting debate, and it has served to point up the differences between Opposition Members and Conservative Members. The Conservative Government believe in spending on local services; we believe in investing in the people for whom the services are provided. That is the essential difference.
The Government will not accept that these services are legitimately provided by local authorities and that they are an investment in the community, an investment in people. I am reminded of remarks that were made a few weeks ago by the hon. Member for Eastwood (Mr. Stewart), the Parliamentary Under-Secretary of State for Scotland, who, in a blinding flash of characteristic honesty, indicated that he wanted to sell everything. If that served to entertain the members of the Scottish Grand Committee, it also showed ultimate contempt for services that reach out to every family and every community the length and breadth of Scotland. Many hon. Members have indicated a similar attitude today by speaking grudgingly about the quality of local government services. Conservative Members find it difficult to manifest empathy with or sympathy for quality service.
One characteristic of the debate has not yet been mentioned. Even if the Government wanted to spend more money on local government—and I do not believe that they do—the real issue would continue to be the public sector borrowing requirement of £50 billion towards which the Government are heading. Let us forget for a

moment whether they care about local government. The real issue is the financial mess in which we find ourselves as a consequence of 14 years of economic failure and incompetence. The Chief Secretary to the Treasury said recently:
Over the course of the Parliament we shall be looking at the direction spending on every programme is taking and whether its purpose remains right for the 1990s. We shall be seeking to identify areas where better targeting can be achieved, or from which the public sector can withdraw completely.
Does not that show that we have a problem with the Conservatives? This settlement reflects the poverty of Conservative thinking, but it reflects also the deep anguish of Opposition Members, who believe that much deeper cuts will be foisted upon the people of Scotland in the next two to three years.
Another feature of the debate has been the central hypocrisy of the Government's argument. Let us remember that, despite record levels of unemployment and record manufacturing bankruptcies, the Government will not intervene. But what happens when they are let loose on a local authority that spends slightly more than its budget figure? We have rate capping, interference in education, and so on. The Government are determined to shape the social agenda, regardless of their commitment to the freedom of local authorities. It is indeed a central hypocrisy. How does the Minister square that attitude with the Government's total idleness in respect of the key issues of the economy—jobs, and so on?
As many of my hon. Friends have said, one of the reasons for the level of local authority expenditure is related to the economic collapse that we face. Tomorrow we shall see a rise in unemployment. I can tell the Minister that the figure in Scotland may rise by 9,000–2,500 people thrown on the scrap heap every week under this regime. That fact must be taken on board. It is not possible to continue to create such levels of unemployment without expecting the regional and district services to pick up the bill for the community initiatives that are necessary to help the unemployed. Does the Minister think that that is a reasonable proposition? Or does he want us to return to the attitude adopted in the early days of this century, when a distinction was drawn between the deserving poor and the undeserving poor? I believe firmly that the Scottish local authorities have done a magnificent job by picking up the pieces left by the Government in applying their disastrous policies.
The Government always miss the importance to Scotland of local authorities. We have heard that those authorities provide excellent services—flagship services, I would argue. They need not be compared with any private sector organisation. They are efficient, value-for-money bodies and, more important, they are accountable. Is not that the essence of democracy? Is not that another of the Government's central contradictions?
Even apart from services, one in six of the Scottish work force is employed by the regions and the districts–300,000 people. Let us imagine what would happen if this evening the Strangers Gallery were packed with people who worked in those services, and they heard the grudging Conservative concessions on the caring services—the police, the fire service, the community care services and investment in jobs and training, whereby young people are given training and an education. Those people would be


appalled by the indifference which the Government continue to show and which, of course, is reflected in the settlement.
We have heard the Government say many times that the settlement is adequate, with pay rises below 1.5 per cent. and inflation—temporarily—at 1.7 per cent. We are all supposed to rejoice and hope that local authorities will be able to survive. But the reality is different from the Government's window dressing.
The council tax, which will be imposed in April, is likely to be £100 higher for every household in the country because of the Government's meanness and sleight of hand over the estimates that they first discussed publicly in the press. Will the Minister explain why the council tax bills will be so much higher, adding another burden for households at a time when we are hoping for a consumer-led recovery? What hypocrisy. The Minister must answer that question.
There was much about community care in the statement. Community care is more than an emotive issue. We all support it—health boards, local authorities and everyone in the House. The tragedy is that, in April, people who leave care or psychiatric hospitals will not have the resources to lead the independent lives and have the dignity that community care was set up to create. What about the lack of funding for community care? Sixty million pounds or so will not even start to measure up to the problems.
In England we see hospitals being emptied far too quickly and local authorities being underfunded to deal with the problem. We shall not tolerate any attempt by Scottish Office Ministers to replicate those problems in Scotland. I hope that when the Minister replies to the debate he will respond to that statement.
Capping has already been mentioned. We have exposed the central hypocrisy and the contradiction in the Government's philosophy—their selective interventions. Why can we not have genuine democracy that allows local authorities to be reasonable and responsible and to provide for the needs in their areas? The Government will have none of that. The settlement is about the sum to be given in revenue support, but it is also about the reason why the Government have taken draconian steps to impose punitive capping on local authorities. Why have they done that? The answer is simple. They abhor what local authorities do and they will not countenance increases in the levels of council tax that they are trying to impose. Of course, they care little for the quality of services and jobs that may be sacrificed.
I said earlier that we shall see tomorrow that unemployment has risen steeply. Is the Minister at all concerned about the crisis in jobs and services that will ensue? One of his close friends in local government—Councillor Charles Gray—is quoted in an article under the heading:
Councils warn jobs may be casualty of spending cuts".
I am glad to see that the Minister is awake—although his response to my jibe was slow.
I ask the Minister how many jobs will be sacrificed as a result of the settlement. Will it be 10,000, 20,000 or 30,000? More importantly for the people who receive the services, what services will be cut? Will the Minister answer? Will he intervene now and tell us what the poverty of the settlement will mean for jobs and services? Those are crucial issues, which we take seriously. The Minister is an

understanding fellow, but he must take those issues seriously. For many, services and jobs mean life and death and they depend on what the Minister does.
We have talked about Government philosophy in the settlement and about the wider aspects of community care. There is another appalling prospect behind the figures that have been announced. What will the Government do about crime? Why are three crimes committed every minute in Scotland? Local government provides excellent services. The police force in Scotland does an excellent job, but it is under-resourced. The Government have given up on crime. They have created record levels, so what do they do? They walk away. They blame the police. It is the scapegoat philosophy which permeates everything they do.
Crime is a cancer in Scottish society. More than 1 million crimes were committed in the last year for which we have figures. There has been a 20 per cent. increase in four years. What will the settlement do to put another policeman on the beat to ensure that people are safe in their houses and on the streets?
The local government settlement is also about the quality of life in our communities. Why were 100,000 Scots homeless last year? We have record homelessness and record crime. Yet the Government pretend that Opposition parties should be satisfied with the settlement. We are not satisfied, either with the amount or with the complacency of some of the comments that we have heard in the debate.
After 14 years of the selfishness and greed of the Government, masquerading as a caring Government, Britain must return to a position where individuals see their future through the community. That is the sensible way forward. If we needed a potent symbol of how the community works, it is the quality, efficiency and value for money provided by Scottish local authorities. That is community in action. It means children being allowed to have the education opportunities that they would never have under the regime which the Government would impose on them. It means people knowing that they can rely on decent services, including the fire service and consumer protection measures which the Tories would like to dismantle.
Can the Minister defend the settlement and promise Scots that they will continue to have the best local government in Europe? Can he guarantee that employment levels will be maintained? More importantly, will he give a commitment to defend the notion of community which has served us well and which is under serious threat?
The Labour party does not want any more contracting out, resulting in shabby services, second-rate facilities and mass unemployment. The challenge to the Minister is to put all that nonsense behind him and to give us a settlement of which we can be proud and which will defend jobs and protect services.

Mr. Stewart: I do not want to make a personal criticism of the hon. Member for Monklands, West (Mr. Clarke); one can safely leave that to his hon. Friends who do so at daily intervals in the Scottish press. However, he was somewhat ungracious about my right hon. Friend the Secretary of State. My right hon. Friend explained to him in a note that he was occupied with forestry interests in his capacity as the United Kindom's forestry Minister.

Mr. Tom Clarke: I had not expected to intervene so soon. I said in my speech that I had received the note, but since the Minister raises the point, I must say that when I am Secretary of State for Scotland, if I am asked to be in the House for two important debates or to attend a dinner with the Forestry Commission, I will be here.

Mr. Stewart: I understand that the betting is that the hon. Gentleman will not be shadow Secretary of State for Scotland for long, never mind Secretary of State for Scotland in the future. It was interesting that the hon. Member for Fife, Central (Mr. McLeish) did not refer once in his winding-up speech to the speech by his hon. Friend the Member for Monklands, West. Perhaps that was a bid for the Scottish leadership.
The speech by the hon. Member for Angus, East (Mr. Welsh) had the great merit of stirring up Labour Members. He got them very worried when he referred to the most interesting speech in Bournemouth by the Leader of the Opposition. Unfortunately, that speech was obviously not communicated to Scottish Labour Members in good time. A number of points made by the hon. Member for Fife, Central were not in line with the new philosophy as spelt out by the right hon. and learned Member for Monklands, East (Mr. Smith).
As always, there were a number of constructive constituency points from Opposition Members, especially from the hon. Member for Western Isles (Mr. Macdonald). I hope that I shall have time to respond to those points. If I cannot do so, I shall be happy to have a discussion with him afterwards.
The hon. Member for Fife, Central praised the excellent services of Scottish local authorities.

Mr. McLeish: indicated assent.

Mr. Stewart: I see that the hon. Gentleman nods. He then said that those authorities had been massively underfunded over the past 14 years. He can hardly have it both ways. If the authorities are providing excellent services, they can hardly have been massively underfunded over a long period.
The hon. Member for Fife, Central asked about the reality. I shall tell Opposition Members what the reality is. The reality is that local authority expenditure per head of population in Scotland is 30 per cent. higher than it is in England and 30 per cent. higher than it is in Wales. Aggregate external finance—specific grants, business rates and revenue support grant—is 47 per cent. higher per head in Scotland than it is in England and 25 per cent. higher than it is in Wales, which is a similar country.
Let us hear no more nonsense from Opposition Members about the Government not giving adequate support to Scottish local government. The facts simply do not show that. In the past five years, there has been a real increase in central Government support to local authorities, after allowing for inflation.

Mr. Hood: Two weeks ago, the Minister received a letter from the Auchlochan Trust, a Christian charitable trust in my constituency. The trust pleaded for the Scottish Office to guarantee the money for providing.community care for hundreds of geriatrics. The trust told the Minister that if it was not given that guarantee, it would have to throw elderly people out into the street and pay off some of its many workers. Has the Minister given that guarantee to the trust?

Mr. Stewart: The community care figures have been mentioned by a number of hon. Members. The hon. Gentleman knows perfectly well that individual decisions are for councils. I shall give him the overall figures for Government support for care in the community. The total figure for care in the community from 1 April is £63.4 million. Some £40–6 million will be transferred from the Department of Social Security, there will be £20 million in respect of additional costs incurred by local authorities next year, and there will be £2.8 million in recognition of the independent living fund successor arrangements.
I emphasise that the amount transferred exceeds the present level of relevant Department of Social Security spending in Scotland by £4 million. In addition, we have allocated more than £20 million to authorities in recognition of community care preparation costs. I entirely refute any claim that local authorities are being underfunded for community care esponsibilities. The Government have taken the additional step of disregarding local authority expenditure on community care for capping purposes. That relates to the point made by my hon. Friend the Member for Ayr (Mr. Gallie).

Mr. Hood: Will the Minister give way?

Mr. Stewart: I have already given way to the hon. Gentleman.
I can assure my hon. Friend the Member for Ayr that the resources will not be ring—fenced but will be spent in full by local authorities without their being required to consider the impact of capping. My hon. Friend the Member for Ayr rightly paid tribute to the achievements of Kyle and Carrick since the change in administration there. In emphasising the excellent record of his authority, my hon. Friend the Member for Kincardine and Deeside (Mr. Kynoch) rightly said that, if the authorities in central Scotland held by the Labour party over the years had followed the policies of Kincardine and Deeside, we should not have the burden of extra business taxation to which the hon. Member for Angus, East referred.
I emphasise that the reason why we have that extra burden is that, fundamentally, local authority spending in Scotland has for a long time been higher than that in England and Wales.

Mr. Brian Wilson: Will the Minister give way?

Mr. Stewart: Hon. Members have also suggested that there have been great cuts in manpower in Scottish local authorities in recent years.

Mr. Wilson: Will the Minister give way?

Mr. Stewart: I should point out that, in each of the past five years, the number of people employed by local authorities in Scotland has increased. So much for all this talk of savage cuts and threats to jobs and services. The number of people employed—

Mr. Wilson: Will the Minister give way?

Mr. Stewart: The number of people employed—

Mr. Wilson: Will the Minister give way?

Madam Speaker: Order. The Minister is not giving way. The hon. Member for Cunninghame, North (Mr. Wilson) should not persist.

Mr. Stewart: rose—

Mr. Nigel Griffiths: Will the Minister give way to me, then?

Mr. Stewart: No, but I finally give way to the hon. Member for Cunninghame, North.

Mr. Wilson: I am grateful to the Minister, who can be very helpful on occasion. He spoke in praise of small low-spending authorities. I draw his attention to the concern felt in parts of my constituency at reports of an attempt to incorporate Largs into a greater Eastwood. The Minister should be aware of the damage that such territorial ambitions do elsewhere in the world. Will he kindly take the opportunity to say that he has no such ambitions towards the people of my constituency?

Mr. Stewart: I do not think that, on this occasion, I should spell out the whole range of ambitions that the people of Eastwood have. I assure the hon. Gentleman that that particular suggestion did not come from anyone who lives in the Eastwood constituency—although my right hon. Friend and I will consider most carefully all the representations that we receive in relation to the reform of Scottish local government.
Hon. Members refer to cuts in manpower. There have not been cuts but increases in manpower. Hon. Members referred to cuts in Strathclyde: in fact, Strathclyde will have the scope to increase its budget next year by some £55 million—an increase of 2.9 per cent. By no means can that be described as a cut. The alleged cuts of which we hear from Opposition Members are cuts in unrealistic spending aspirations. They are not real cuts.
A number of hon. Members have made specific points. My hon. Friend the Member for Tayside, North (Mr. Walker) rightly referred to the problems of flooding that have been faced by his constituency and its local authorities. He asked for sympathetic consideration to be given to the representations, in particular with regard to capital allocations. My hon. Friend will not expect a commitment from me tonight but I can confirm that we will consider such representations most sympathetically.
The hon. Members for Orkney and Shetland (Mr. Wallace) and for Western isles raised the issue of the special islands needs allowance and asked me for an assurance that it will continue. I can confirm to both hon. Members that we have no plans to end the allowance, having just received a consultants' report. Inevitably, we will have to examine it once single-tier authorities are introduced on the mainland. I can give an assurance that the Government recognise the problems of the islands' authorities.
I can confirm that we have decided that the special funds to which the hon. Member for Orkney and Shetland referred should not be taken into account in determining the distribution of the special islands needs allowance. That was recommended by the consultants, and we have accepted it.
Opposition Members allege that Lothian is unfairly treated. I remind them yet again that the special funds are distributed formally or by a distribution committee which consists of members from the Convention of Scottish Local Authorities as well as the Scottish Office. Lothian has a lower number of assessed needs for several obvious reasons—the low proportion of people in education authority schools and it is relatively prosperous and small.

Mr. Nigel Griffiths: Will the Minister give way?

Mr. Stewart: I do not have the time: I apologise to the hon. Gentleman.
In the past five years, the level of Government support in real terms has increased for Scottish local authorities. The settlement is realistic and fair.
All that we have heard from Opposition Members are the usual allegations about cuts which are not real cuts and demands for much more money to be spent on everything in sight without any attempt to allocate costs or to indicate how the money will be provided. The Government are increasing the funds available to Scottish local authorities by 3.5 per cent. at a time when inflation is 1.7 per cent. and 60 per cent. of the costs are wages. As my hon. Friend the Member for Kincardine and Deeside said, the settlement is fair and reasonable.
It being three hours after the commencement of proceedings on the motion, MADAM SPEAKER proceeded to put forthwith the Question necessary to dispose of them, pursuant to order [12 February].

The House divided: Ayes 303, Noes 251.

Division No. 157]
[10.22 pm


AYES


Adley, Robert
Clappison, James


Ainsworth, Peter (East Surrey)
Clark, Dr Michael (Rochford)


Alexander, Richard
Clifton-Brown, Geoffrey


Alison, Rt Hon Michael (Selby)
Coe, Sebastian


Allason, Rupert (Torbay)
Congdon, David


Amess, David
Conway, Derek


Ancram, Michael
Coombs, Anthony (Wyre For'st)


Arbuthnot, James
Coombs, Simon (Swindon)


Arnold, Jacques (Gravesham)
Cope, Rt Hon Sir John


Arnold, Sir Thomas (Hazel Grv)
Couchman, James


Ashby, David
Cran, James


Aspinwall, Jack
Currie, Mrs Edwina (S D'by'ire)


Atkins, Robert
Curry, David (Skipton  Ripon)


Atkinson, David (Bour'mouth E)
Davies, Quentin (Stamford)


Atkinson, Peter (Hexham)
Day, Stephen


Baker, Nicholas (Dorset North)
Deva, Nirj Joseph


Baldry, Tony
Devlin, Tim


Banks, Matthew (Southport)
Dickens, Geoffrey


Banks, Robert (Harrogate)
Dicks, Terry


Bates, Michael
Dorrell, Stephen


Batiste, Spencer
Douglas-Hamilton, Lord James


Bellingham, Henry
Dover, Den


Bendall, Vivian
Duncan, Alan


Beresford, Sir Paul
Duncan-Smith, Iain


Biffen, Rt Hon John
Durant, Sir Anthony


Blackburn, Dr John G.
Dykes, Hugh


Body, Sir Richard
Elletson, Harold


Booth, Hartley
'Emery, Rt Hon Sir Peter


Boswell, Tim
Evans, David (Welwyn Hatfield)


Bottomley, Peter (Eltham)
Evans, Jonathan (Brecon)


Bottomley, Rt Hon Virginia
Evans, Nigel (Ribble Valley)


Bowden, Andrew
Evans, Roger (Monmouth)


Bowis, John
Evennett, David


Boyson, Rt Hon Sir Rhodes
Faber, David


Brandreth, Gyles
Fabricant, Michael


Brazier, Julian
Fenner, Dame Peggy


Bright, Graham
Field, Barry (Isle of Wight)


Brooke, Rt Hon Peter
Fishburn, Dudley


Brown, M. (Brigg  Cl'thorpes)
Forman, Nigel


Browning, Mrs. Angela
Forsyth, Michael (Stirling)


Bruce, Ian (S Dorset)
Forth, Eric


Budgen, Nicholas
Fowler, Rt Hon Sir Norman


Burns, Simon
Fox, Dr Liam (Woodspring)


Butcher, John
Fox, Sir Marcus (Shipley)


Butler, Peter
Freeman, Roger


Butterfill, John
French, Douglas


Carlisle, John (Luton North)
Fry, Peter


Carlisle, Kenneth (Lincoln)
Gale, Roger


Carrington, Matthew
Gallie, Phil


Carttiss, Michael
Gardiner, Sir George


Cash, William
Garel-Jones, Rt Hon Tristan


Channon, Rt Hon Paul
Garnier, Edward






Gill, Christopher
Maitland, Lady Olga


Gillan, Cheryl
Malone, Gerald


Goodlad, Rt Hon Alastair
Mans, Keith


Goodson-Wickes, Dr Charles
Marland, Paul


Gorman, Mrs Teresa
Marlow, Tony


Gorst, John
Marshall, John (Hendon S)


Grant, Sir Anthony (Cambs SW)
Marshall, Sir Michael (Arundel)


Greenway, Harry (Ealing N)
Martin, David (Portsmouth S)


Greenway, John (Ryedale)
Mates, Michael


Griffiths, Peter (Portsmouth, N)
Mawhinney, Dr Brian


Grylls, Sir Michael
Mayhew, Rt Hon Sir Patrick


Gummer, Rt Hon John Selwyn
Mellor, Rt Hon David


Hague, William
Merchant, Piers


Hamilton, Rt Hon Archie (Epsom)
Milligan, Stephen


Hamilton, Neil (Tatton)
Mills, Iain


Hampson, Dr Keith
Mitchell, Andrew (Gedling)


Hannam, Sir John
Moate, Sir Roger


Hargreaves, Andrew
Monro, Sir Hector


Harris, David
Montgomery, Sir Fergus


Haselhurst, Alan
Moss, Malcolm


Hawkins, Nick
Needham, Richard


Hawksley, Warren
Nelson, Anthony


Hayes, Jerry
Neubert, Sir Michael


Heald, Oliver
Newton, Rt Hon Tony


Heathcoat-Amory, David
Nicholls, Patrick


Hendry, Charles
Nicholson, David (Taunton)


Heseltine, Rt Hon Michael
Nicholson, Emma (Devon West)


Hicks, Robert
Norris, Steve


Higgins, Rt Hon Sir Terence L.
Onslow, Rt Hon Sir Cranley


Hill, James (Southampton Test)
Oppenheim, Phillip


Hogg, Rt Hon Douglas (G'tham)
Ottaway, Richard


Horam, John
Page, Richard


Hordern, Rt Hon Sir Peter
Paice, James


Howard, Rt Hon Michael
Pattie, Rt Hon Sir Geoffrey


Howarth, Alan (Strat'rd-on-A)
Pawsey, James


Howell, Rt Hon David (G'dford)
Peacock, Mrs Elizabeth


Hughes Robert G. (Harrow W)
Pickles, Eric


Hunt, Rt Hon David (Wirral W)
Porter, David (Waveney)


Hunt, Sir John (Ravensbourne)
Portillo, Rt Hon Michael


Hunter, Andrew
Powell, William (Corby)


Hurd, Rt Hon Douglas
Rathbone, Tim


Jack, Michael
Redwood, John


Jackson, Robert (Wantage)
Renton, Rt Hon Tim


Jenkin, Bernard
Richards, Rod


Jessel, Toby
Riddick, Graham


Johnson Smith, Sir Geoffrey
Robathan, Andrew


Jones, Gwilym (Cardiff N)
Roberts, Rt Hon Sir Wyn


Jones, Robert B. (W Hertfdshr)
Robertson, Raymond (Ab'd'n S)


Jopling, Rt Hon Michael
Robinson, Mark (Somerton)


Kellett-Bowman, Dame Elaine
Roe, Mrs Marion (Broxbourne)


Key, Robert
Rowe, Andrew (Mid Kent)


Kilfedder, Sir James
Rumbold, Rt Hon Dame Angela


King, Rt Hon Tom
Ryder, Rt Hon Richard


Kirkhope, Timothy
Sackville, Tom


Knapman, Roger
Sainsbury, Rt Hon Tim


Knight, Mrs Angela (Erewash)
Scott, Rt Hon Nicholas


Knight, Greg (Derby N)
Shaw, David (Dover)


Knight, Dame Jill (Bir'm E'st'n)
Shaw, Sir Giles (Pudsey)


Kynoch, George (Kincardine)
Shephard, Rt Hon Gillian


Lait, Mrs Jacqui
Shepherd, Colin (Hereford)


Lamont, Rt Hon Norman
Shepherd, Richard (Aldridge)


Lang, Rt Hon Ian
Sims, Roger


Lawrence, Sir Ivan
Skeet, Sir Trevor


Legg, Barry
Smith, Sir Dudley (Warwick)


Leigh, Edward
Smith, Tim (Beaconsfield)


Lennox-Boyd, Mark
Soames, Nicholas


Lester, Jim (Broxtowe)
Spencer, Sir Derek


Lidington, David
Spicer, Sir James (W Dorset)


Lightbown, David
Spicer, Michael (S Worcs)


Lilley, Rt Hon Peter
Spink, Dr Robert


Lloyd, Peter (Fareham)
Spring, Richard


Lord, Michael
Sproat, Iain


Luff, Peter
Squire, Robin (Hornchurch)


Lyell, Rt Hon Sir Nicholas
Stanley, Rt Hon Sir John


MacGregor, Rt Hon John
Steen, Anthony


MacKay, Andrew
Stephen, Michael


Maclean, David
Stern, Michael


McLoughlin, Patrick
Stewart, Allan


McNair-Wilson, Sir Patrick
Streeter, Gary


Madel, David
Sumberg, David





Sweeney, Walter
Waller, Gary


Sykes, John
Ward, John


Tapsell, Sir Peter
Wardle, Charles (Bexhill)


Taylor, Ian (Esher)
Waterson, Nigel


Taylor, John M. (Solihull)
Watts, John


Taylor, Sir Teddy (Southend, E)
Wells, Bowen


Temple-Morris, Peter
Wheeler, Rt Hon Sir John


Thomason, Roy
Whitney, Ray


Thompson, Sir Donald (C'er V)
Whittingdale, John


Thompson, Patrick (Norwich N)
Wiggin, Sir Jerry


Thornton, Sir Malcolm
Willetts, David


Thurnham, Peter
Wilshire, David


Townend, John (Bridlington)
Winterton, Mrs Ann (Congleton)


Townsend, Cyril D. (Bexl'yh'th)
Wolfson, Mark


Tracey, Richard
Wood, Timothy


Tredinnick, David
Yeo, Tim


Trend, Michael
Young, Sir George (Acton)


Twinn, Dr Ian



Vaughan, Sir Gerard
Tellers for the Ayes:


Waldegrave, Rt Hon William
Mr. Sydney Chapman and


Walden, George
Mr. Irvine Patrick.


Walker, Bill (N Tayside)



NOES


Abbott, Ms Diane
Cousins, Jim


Adams, Mrs Irene
Cox, Tom


Ainger, Nick
Cryer, Bob


Ainsworth, Robert (Cov'try NE)
Cummings, John


Allen, Graham
Cunliffe, Lawrence


Alton, David
Cunningham, Jim (Covy SE)


Anderson, Donald (Swansea E)
Dalyell, Tarn


Anderson, Ms Janet (Ros'dale)
Darling, Alistair


Armstrong, Hilary
Davies, Ron (Caerphilly)


Ashton, Joe
Davis, Terry (B'ham, H'dge H'I)


Austin-Walker, John
Denham, John


Banks, Tony (Newham NW)
Dixon, Don


Barnes, Harry
Dobson, Frank


Barron, Kevin
Donohoe, Brian H.


Battle, John
Dowd, Jim


Bayley, Hugh
Dunnachie, Jimmy


Beckett, Rt Hon Margaret
Dunwoody, Mrs Gwyneth


Beith, Rt Hon A. J.
Eagle, Ms Angela


Bell, Stuart
Eastham, Ken


Benn, Rt Hon Tony
Enright, Derek


Bennett, Andrew F.
Etherington, Bill


Benton, Joe
Evans, John (St Helens N)


Bermingham, Gerald
Ewing, Mrs Margaret


Berry, Dr. Roger
Fatchett, Derek


Betts, Clive
Field, Frank (Birkenhead)


Blair, Tony
Fisher, Mark


Blunkett, David
Flynn, Paul


Boateng, Paul
Foster, Rt Hon Derek


Boyce, Jimmy
Foulkes, George


Boyes, Roland
Fraser, John


Bradley, Keith
Fyfe, Maria


Bray, Dr Jeremy
Galbraith, Sam


Brown, Gordon (Dunfermline E)
Galloway, George


Brown, N. (N'c'tle upon Tyne E)
Gapes, Mike


Burden, Richard
Garrett, John


Byers, Stephen
Gerrard, Neil


Caborn, Richard
Gilbert, Rt Hon Dr John


Callaghan, Jim
Godman, Dr Norman A.


Campbell, Mrs Anne (C'bridge)
Godsiff, Roger


Campbell, Ronnie (Blyth V)
Golding, Mrs Llin


Campbell-Savours, D. N.
Gordon, Mildred


Canavan, Dennis
Gould, Bryan


Cann, Jamie
Graham, Thomas


Carlile, Alexander (Montgomry)
Griffiths, Nigel (Edinburgh S)


Chisholm, Malcolm
Griffiths, Win (Bridgend)


Clapham, Michael
Grocott, Bruce


Clark, Dr David (South Shields)
Gunnell, John


Clarke, Eric (Midlothian)
Hain, Peter


Clarke, Tom (Monklands W)
Hall, Mike


Clelland, David
Hanson, David


Clwyd, Mrs Ann
Hardy, Peter


Coffey, Ann
Harvey, Nick


Connarty, Michael
Henderson, Doug


Cook, Robin (Livingston)
Heppell, John


Corbyn, Jeremy
Hill, Keith (Streatham)


Corston, Ms Jean
Hinchliffe, David






Hoey, Kate
McNamara, Kevin


Hood, Jimmy
Madden, Max


Hoon, Geoffrey
Mahon, Alice


Howells, Dr. Kim (Pontypridd)
Mandelson, Peter


Hoyle, Doug
Marek, Dr John


Hughes, Kevin (Doncaster N)
Marshall, David (Shettleston)


Hughes, Simon (Southwark)
Marshall, Jim (Leicester, S)


Hutton, John
Martin, Michael J. (Springburn)


Ingram, Adam
Martlew, Eric


Jackson, Glenda (H'stead)
Maxton, John


Jackson, Helen (Shef'ld, H)
Meacher, Michael


Jamieson, David
Meale, Alan


Johnston, Sir Russell
Michael, Alun


Jones, Barry (Alyn and D'side)
Michie, Mrs Ray (Argyll Bute)


Jones, Jon Owen (Cardiff C)
Milburn, Alan


Jones, Lynne (B'ham S O)
Miller, Andrew


Jones, Martyn (Clwyd, SW)
Mitchell, Austin (Gt Grimsby)


Jowell, Tessa
Moonie, Dr Lewis


Kaufman, Rt Hon Gerald
Morgan, Rhodri


Keen, Alan
Morley, Elliot


Kennedy, Charles (Ross,CS)
Morris, Rt Hon A. (Wy'nshawe)


Kennedy, Jane (Lpool Brdgn)
Morris, Estelle (B'ham Yardley)


Khabra, Piara S.
Morris, Rt Hon J. (Aberavon)


Kilfoyle, Peter
Mowlam, Marjorie


Kinnock, Rt Hon Neil (Islwyn)
Mudie, George


Kirkwood, Archy
Mullin, Chris


Leighton, Ron
Murphy, Paul


Lewis, Terry
Oakes, Rt Hon Gordon


Litherland, Robert
O'Brien, Michael (N W'kshire)


Livingstone, Ken
O'Brien, William (Normanton)


Lloyd, Tony (Stretford)
O'Hara, Edward


Loyden, Eddie
Olner, William


Lynne, Ms Liz
O'Neill, Martin


McAvoy, Thomas
Orme, Rt Hon Stanley


McCartney, Ian
Parry, Robert


Macdonald, Calum
Pickthall, Colin


McFall, John
Pike, Peter L.


McKelvey, William
Pope, Greg


Mackinlay, Andrew
Powell, Ray (Ogmore)


McLeish, Henry
Prentice, Ms Bridget (Lew'm E)


Maclennan, Robert
Prentice, Gordon (Pendle)


McMaster, Gordon
Prescott, John





Primarolo, Dawn
Stevenson, George


Purchase, Ken
Stott, Roger


Quin, Ms Joyce
Strang, Dr. Gavin


Radice, Giles
Straw, Jack


Randall, Stuart
Taylor, Mrs Ann (Dewsbury)


Raynsford, Nick
Taylor, Matthew (Truro)


Redmond, Martin
Tipping, Paddy


Reid, Dr John
Turner, Dennis


Robinson, Geoffrey (Co'try NW)
Tyler, Paul


Roche, Mrs. Barbara
Vaz, Keith


Rogers, Allan
Walker, Rt Hon Sir Harold


Rooney, Terry
Wallace, James


Ross, Ernie (Dundee W)
Wardell, Gareth (Gower)


Rowlands, Ted
Wareing, Robert N


Ruddock, Joan
Watson, Mike


Salmond, Alex
Welsh, Andrew


Sedgemore, Brian
Wicks, Malcolm


Sheerman, Barry
Williams, Rt Hon Alan (Sw'n W)


Sheldon, Rt Hon Robert
Williams, Alan W (Carmarthen)


Shore, Rt Hon Peter
Wilson, Brian


Short, Clare
Winnick, David


Simpson, Alan
Wise, Audrey


Skinner, Dennis
Worthington, Tony


Smith, Andrew (Oxford E)
Wray, Jimmy


Smith, C. (Isl'ton S  F'sbury)
Wright, Dr Tony


Smith, Llew (Blaenau Gwent)



Snape, Peter
Tellers for the Noes:


Soley, Clive
Mr. Jack Thompson and


Squire, Rachel (Dunfermline W)
Mr. John Spellar


Steinberg, Gerry

Question accordingly agreed to.

Resolved,
That the Revenue Support Grant (Scotland) Order 1993, dated 2nd February 1993, which was laid before this House on 4th February, be approved.

Resolved,
That the Local Government Finance (Scotland) Order 1993, dated 2nd February 1993, which was laid before this House on 4th February, be approved.—[Mr.Stewart.]

Housing Support Grant (Scotland)

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): I beg to move,
That the draft Grant (Scotland) Order 1993, which was laid before this House on 21 January, be approved.
I propose to keep my opening remarks brief. This is the 15th annual housing support grant order laid before the House. Many hon. Members will have speeches to make on constituency issues. Hon. Members will remember that housing support grant is a deficit subsidy paid to local authorities that, on the basis of reasonable assumptions about income and expenditure, would otherwise be unable to meet the costs of council housing from their rental income. Full details of the grant settlement for the next financial year are set out in the order and the accompanying report.
As always, I express my thanks to the Convention of Scottish Local Authorities, with whom the grant settlement has been discussed. Although the convention has reservations about certain aspects of the settlement, I am grateful for the constructive and helpful approach which it takes in our annual discussions on these matters.
The draft order provides that the total grant payable next year will be £ 35.852 million. That sum represents the difference between the eligible expenditure and the relevant income of authorities that, in the absence of grant, would have a deficit on their housing revenue accounts.
Eligible expenditure consists mainly of loan charges and of management and maintenance spending. The loan charges that we estimate that authorities will have to meet in the next financial year are—as is usual—based on a projection of each authority's capital debt to the mid-point of the financial year, taking account of new borrowing and debt redemption. In order to calculate interest charges, we apply to those projections of capital debt the pool interest rate expected for local authority debt next year. Our present estimate of that rate is 9.3 per cent. Interest rates may fluctuate, however, and I assure the House that if there is a significant change in the estimate of the pool rate, the Government will— in line with the usual practice— bring forward an appropriate variation order to adjust the amount of grant payable. For the moment, our estimate of the total loan charges to be met from local authority housing revenue accounts in Scotland amounts to £487 million.
The other major item of eligible expenditure is that on management and maintenance of the housing stock. Our estimate of eligible management and maintenance spending in 1993–94 is based on an assumed average spending level of £605 per house—a 15 per cent. increase over the equivalent average for the current year. That provides evidence that the Government are prepared to meet their share of the cost of the improvement in management and maintenance services that will arise from the adoption of the tenants charter.

Dr. Norman A. Godman: How wide-ranging is the definition of hostel in paragraph 3(3)? Does it include women's refuges and, if so, will what the Minister has to say tonight enable those managing women's refuges to seek extra money to develop their services to meet the growing need for such hostel accommodation?

Lord James Douglas-Hamilton: I agree that women's refuges are important. I shall make certain that the hon. Gentleman is given a full reply during the wind-up. My impression is that they are covered, but I shall make certain and come back to the hon. Gentleman on the matter.

Mr. George Foulkes: The Minister is describing what he says is a generous settlement for local authorities. If it is, could he explain why Kyle and Carrick district council, much praised by some Conservative Members earlier and now Conservative controlled, is raising rents for local authority tenants by an average £5 a week and in some cases by as much as £15 a week? That means that some tenants simply cannot pay—especially those whose wages are frozen or who have been limited to small increases. Does he agree with the council's action; or does he agree with me that it is disgraceful?

Lord James Douglas-Hamilton: I shall deal with rents generally first—

Mr. Foulkes: No.

Lord James Douglas-Hamilton: I shall come back to the hon. Gentleman in due course.
As for standard rents, the assumed average rent for 1993–94 is £30.32 per house per week. I stress that that is not a forecast of the actual average local authority rent for next year; nor is it a guideline or recommendation. It is the average rent which, for the purposes of the grant calculations, we consider that authorities should reasonably be expected to receive. The actual rents of authorities may be higher or lower, according to their own decisions about income and expenditure. I shall discuss the implications of the subsidy settlement for actual rents in a few moments, but the actual rent levels are a matter for the district councils to decide—

Mr. Foulkes: rose—

Lord James Douglas-Hamilton: I should draw the attention of the House to certain changes in the way in which the grant for next year has been calculated. Hon. Members should appreciate that, although the broad lines of the methodology of the grant system are by now well established, there is a continuing evolution of the system at the margin. For instance, the grant settlement for next year reflects—

Mr. Foulkes: rose—

Lord James Douglas-Hamilton: The hon. Gentleman should allow me to follow this through; he needs to see the whole subject in perspective. I know that he feels strongly about his local council.
The settlement for next year reflects a different method of assessing whether grant entitlements should be adjusted to reflect overpayments or underpayments in earlier years. The former arrangements involved the use of penny rate products to establish whether the difference between an authority's loan charges as estimated for the earlier grant year and actual loan charges was substantial enough to warrant an adjustment. With the agreement of the Convention of Scottish Local Authorities, the use of penny rate products has been abandoned in favour of a rent product of 70p per house per week as a threshold to determine whether an adjustment is necessary.
We have also responded to the convention's representations about the way in which we estimate the amounts or rents lost as a result of vacant houses. In particular, we have taken account of the numbers of houses held empty and not available for letting. Estimated rents lost for authorities with a high proportion of houses held empty for this reason have been based on 3 per cent. of assumed rental income, compared with 2 per cent. for other authorities. Again, COSLA has welcomed this change.

Mr. John Maxton: I accept that, but if a local authority decides to redevelop a large number of its council houses, as Glasgow has done in Castlemilk with the full co-operation of the Government, is it not absurd that it then loses housing support grant because the houses are standing empty and thus making no rental income?

Lord James Douglas-Hamilton: The change has been welcomed by COSLA and it takes into account precisely the point that the hon. Gentleman makes. The figure is based, for authorities with a high proportion of housing held empty, on 3 per cent. of assumed rental income. That is a move in the direction that the hon. Gentleman wants.
I should also mention the hostels portion of housing support grant. Since we took the decision two years ago to extend hostels grant to all authorities with hostels, rather than limiting hostels grant to authorities that qualified on the basis of their housing revenue accounts as a whole, there has been a welcome increase in the number of hostel places made available by local authorities, from 1,796 in 1990 to 1,956 in 1992. The Government's decision to make available additional capital allocations specifically aimed at relieving homelessness means that the number of hostel places will continue to grow over the next year.
I recognise that hostels are far from the complete answer to homelessness, but they make a signification contribution to dealing with the single homeless. Following consultation with COSLA, a maximum cost per hostel place will be introduced next year. It has been set at a generous level. For each authority, it is three times the average net cost per hostel place for local authority hostels as a whole—multiplied by the number of hostel places provided by the authority.
The hostels portion of grant next year will amount to more than £ 1.6 million, shared among 18 authorities.

Mr. Thomas Graham: Will the Minister give an assurance that the Asian women's refuge in my constituency will not close? I understand that it is threatened, and many people are anxious to ensure that that facility remains open. Can the Minister give that categorical assurance, so that the Asian folk in Strathclyde can rest in peace?

Lord James Douglas-Hamilton: I should like to know more about that. That is almost certainly a local authority decision. If that hostel has been given assistance by urban aid or other Scottish Office sources I shall be happy to make inquiries and will reply to the hon. Gentleman.

Mr. Dennis Canavan: Falkirk district council is listed among the minority of local authorities that receive a portion of housing support grant for hostels, but no figure is given. How much will Falkirk district council receive? Also, why do only a minority of housing authorities in Scotland qualify for general or hostel

housing support grant? When the system was introduced by a Labour Government, virtually every housing authority in Scotland qualified. In terms of general housing support grant, Falkirk has not received a single penny from this rotten Government for more than a decade.

Lord James Douglas-Hamilton: Housing support grant is a deficit subsidy. The hon. Gentleman asks why some authorities are not included. The size of the potential deficit determines grant entitlement. Some authorities have a relatively small deficit, so even small changes in estimated income or expenditure may have a large impact on their deficit. Other authorities have a potentially large deficit.
If I had to give a simplistic example, I would say that authorities that built a large volume of housing in relatively recent years may find that they have much larger loan charges, and therefore are much more likely to qualify for housing support grant than authorities with older housing stock.
Changes in estimated expenditure or income have only a marginal effect on the potential deficit and, therefore, on the grant entitlement. As to the hostel portion, I will answer the hon. Gentleman when I wind up and have the figures to hand.

Dr. Godman: rose—

Lord James Douglas-Hamilton: I will also answer the hon. Gentleman's question about hostels, in relation to women's refuges in his constituency.

Dr. Godman: rose—

Mr. Deputy Speaker (Mr. Michael Morris): Order. The hon. Gentleman cannot just stand up like that when the Minister is at the Dispatch Box. He can ask the Minister to give way, but if the Minister chooses not to do so, the hon. Gentleman must accept that.

Lord James Douglas-Hamilton: The hon. Gentleman is very persistent. I will give way to him now, but I have quite a bit to say, and I want to hear all the constituency speeches that other hon. Members may wish to make.

Dr. Godman: I thank the Minister for giving way with characteristic courtesy—the kind of courtesy which I like to extend to him.
Hostels are an important issue, especially in view of the implications of care in the community. Many people will be released into the community, and some will be staying in hostels. Where does Inverclyde come in, and what funds will the district council receive for providing hostel accommodation for those covered by the community care provisions?

Lord James Douglas-Hamilton: The final allocations for housing must be made available in March. We are giving high priority to community care, in regard to the funding of both local authorities and Scottish Homes. The hon. Gentleman can be certain that we shall be very specific about that when we make the final allocations.
The hon. Gentleman asked for a definition of hostels. Women's refuge hostels are usually owned by voluntary organisations; because they are not owned by local authorities, they do not qualify for housing support grant, which, in accordance with statute, is restricted to houses and hostels owned by the authorities themselves. Financial


assistance from local authorities for women's refuges is usually provided under the Social Work (Scotland) Act 1968. That assistance is subsidised through the aggregate external finance settlement discussed earlier this evening.
The hon. Member for Falkirk, West (Mr. Canavan) asked about the hostels proportion in Falkirk. I understand that it is £154,770 in 1993–94, compared with the lesser figure of £123,120 in 1992–93. The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) asked about rents. I repeat that that is entirely a matter for the council: Kyle and Carrick's rent was only £20.46 per house per week in 1992–93, well below the Scottish average of £24.75.

Mr. Foulkes: rose—

Lord James Douglas-Hamilton: The hon. Gentleman can make his own case in his own way if he catches the eye of the Chair.
General fund contributions represent a subsidy from council tax payers to council house tenants. This kind of subsidy is indiscriminate, in that it benefits all tenants regardless of their personal circumstances; and it is unnecessary, to the extent that tenants who are unable to meet the costs of their housing receive assistance in the form of housing benefit. I make no apology for our proposals in the General Fund Contribution Limits (Scotland) Order 1993 to bar authorities from budgeting to make general fund contributions next year. Local authorities have been consulted individually about the proposals, and only 11 of them saw fit to make representations on the matter. I have examined those representations carefully and have concluded that none of the authorities concerned requires to increase rents by an amount that would justify a subsidy from the council tax payer.
The effect of the subsidy proposals on local authority rent levels will vary. As I said earlier, decisions on rents are for local authorities to make. The majority of authorities do not receive housing support grant in respect of their council housing; nor do they make general fund contributions. The rent decisions of those authorities are obviously unaffected by changes in the overall level of subsidy. Even in the case of authorities that receive or make subsidy, changes in the level of that subsidy from year to year are usually less important for local rent decisions than changes in levels of expenditure, particularly expenditure on loan charges.
Because of the general reductions in interest rates during the current financial year, loan charges next year are expected to be lower than this year's. As a result, the majority of local authorities should be able to make real improvements in the level of management and maintenance services with which they provide their tenants, with relatively modest rent increases.

Mr. Foulkes: rose—

Lord James Douglas Hamilton: I will give way to the hon. Gentleman one last time.

Mr. Foulkes: I am grateful to the hon. Gentleman for giving way. He is a very helpful Minister, which is why I want to ask him what advice I should give my constituents, who are being by required Tory-controlled Kyle and

Carrick district council to pay £15 a week more than last year. Where do they find the money when their wages are frozen?

Lord James Douglas-Hamilton: If I were in the hon. Gentleman's place, I would find out exactly what the council intended to deliver for tenants in its housing programme. If that involves major schemes of modernisation and improvements in management and maintenance, that should be taken into account. The council must decide what levels of rent to fix.
When I met COSLA last month—

Mr. Maxton: Before the Minister moves off rents—

Lord James Douglas-Hamilton: I have not moved off rents; I am just finishing the point.
When I met COSLA, I predicted that rents would increase by about 7 per cent. overall, but that predication now seems to be on the high side, as Edinburgh and Glasgow are considering increases of 6 per cent. or less. The proposals being considered tonight constitute a fair and reasonable subsidies package that balances the interests of the tenant, the council taxpayer and the national taxpayer, and I strongly commend the order to the House.

Mrs. Maria Fyfe: Listening to the Minister, Mr. Deputy Speaker, you would never think that thousands of Scottish houses are unfit to live in, that children in bed-and-breakfast accommodation are more likely than others to suffer from ill health, and that, among these children, gastro-enteritis and chest infections are normal. Listening to him, you would not think that people with disabilities wait years for suitably adapted housing, that overcrowded families cannot be housed because the council does not have the right size of housing for their needs or that single men and women can wait years just to get a small flat. As my hon. Friends have pointed out, nor would you think that refuges for women who are in danger and in need of that accommodation are so terribly lacking compared with the level of need.
On 18 January, the Minister proclaimed that it was the Government's long-term aim to reduce "indiscriminate" grants such as housing grant, and that subsidies should be more personalised, such as housing benefit. This year, housing support grant will fall from £47.5 million to £36 million—three quarters of this year's housing support grant. That is what the Minister calls an adequate and suitable settlement. At this rate of reduction, it will not be long before it ends altogether. But housing benefit does not make up the shortfall in money needed to take care of housing stock; it is part of the social security system. It does nothing for the fabric of buildings.
Far from making up lost income to carry out improvements, the Minister is presiding over a total cash reduction of more than £56 million. Housing support grant has been chopped by £11.6 million and the general fund contribution, which he mentioned earlier and which at present is a mere £1.5 million, is to be reduced to zero. Does he realise that not only owner-occupiers but tenants pay the council tax? Gross capital consents are to be reduced by £43 million.
The Minister drew attention to an extra £5 million in consents for community care. Would it not be more caring if he provided hard cash? When we take inflation into


account, the council tenant might reasonably expect the total to rise slightly, instead of which there is a reduction in real terms of 15 per cent., or £70 million.
In the past decade, by such methods, more than £1,500 million of direct Government support has been denied to Scottish local authority houses. That money could have treated damp walls, replaced roofs and dangerous wiring and preserved pride in communities where houses have not seen a lick of paint in donkey's years and where tenants feel that their area is getting less desirable with every year that passes.
Gross capital consents—permission to incur capital expenditure — have been reduced by a further 10 per cent. Even the limit imposed of £385 million depends on no less than £251 million–65 per cent.—being raised by selling council houses. If district councils cannot hit that preposterous target, the Minister will not recognise reality and permit further borrowing.
Does he seriously believe that that level of sales can be achieved when, daily, people are being thrown out of work and fear being thrown on the scrap heap? It is particularly galling that so many jobs have been lost in the construction industry. Between 1991 and 1992, 1,036 construction jobs were lost to Scottish local authorities. There is work to be done, and the skills are there, but the Government do not want to know.
It need not be like that. There have been crash programmes of home building under Labour Housing Ministers, and even pre-Thatcherite Tories did better than this lot. As recently as 1981, the Scottish housing authorities built 7,000 houses for rent, but 10 years later, in 1991, the total had dropped to a mere 1,546. It takes a sort of perverse genius to cut the number of houses being built and, at the same time, to raise rents, which pay off housing debt, to such an extent as the Government have done.
In 1979, the average council house rent was £4.92 a week. Under this Government, it has risen to £24.75 a week, and the reduction in housing support grant is based on the assumption that rents will rise to an average of £30.32 a week, as the Minister said. Of course, some will be higher and some will be lower—that is what an average means.
The tenants are not getting better housing for their money—it is being used to pay debts. A few people apparently believe, or would have us believe, that there is a simple solution for councillors, and that only a want of political will and principle prevents them from carrying it out. The slogan is, "Don't pay the debts; force the Government to come to the rescue." How odd it is that Trotskyites have more faith in the humanitarian response of the Tories than any of my colleagues. But if, while we are waiting for the miracle, anyone knows a lender who does not mind his loans not being repaid, will he quickly tell the rest of us?
We cannot expect humanity from the Government, but can we at least attempt to reason with them? They know, because their policies dictate it, that rents have been rising at well above the rate of inflation. Tenants' rents are bearing a far heavier share of the payment of loan debts. In fact, the debts are now almost exclusively funded from rents. That being the case, why does the Minister not remove the barriers to borrowing and let councils decide independently how much they want to borrow for capital projects? The Exchequer is not paying much and intends to

pay less, and the Government will not allow any contribution from the council tax. It is the tenants who are paying.

Mr. Phil Gallie: If the Government were to give greater capital consent, since many councils do not receive housing support grant to supplement their financial support for housing, would it not make the situation worse for tenants?

Mrs. Fyfe: I hope that the hon. Gentleman will explain later why getting further permission to borrow to build houses will make matters worse. I shall be interested to hear what he has to say.
I also wonder why the Government will not respond to council appeals to write off loan debt. Let us take Glasgow as an example. If the city's debt were written off, its housing officials say that it would have had £119 million to spend immediately, without incurring any debts. Public companies that have been privatised have had millions of pounds of outstanding loan debts redeemed. It is a political decision to give to one but not the other. That means that there is champagne on ice in the boardroom but cold and damp in many a council house bedroom. If the Government will consider write-off when the value of the asset is less than the outstanding debt, why in the name of logic do they not redeem the debt on houses that councils are demolishing?
Let us consider the picture in Scotland today. More than 100,000 dwellings are below the tolerable standard, and the single most common reason is dampness. At the current level of funding, it will be well past the year 2000 before we even catch up on those presently affected.
Homelessness has reached a record level, topping last year's and the year before's, of 37,519 families.
Everyone knows that inadequate housing creates health problems. Shelter estimates that the health of 120,000 Scottish children is in severe danger owing to the fact that they live in damp and dangerous housing. These views are backed up by Glasgow's director of public health, who has recently written a hard-hitting report which points out:
half of all households with children have some problems with dampness or condensation. A quarter of a million Glaswegians live in accommodation affected by dampness or condensation.
Asthma and bronchitis are rife. Hon. Members representing other constituencies have similar stories to tell.
Fifty years ago, Beveridge had a vision of a society free from poverty. In the immediate aftermath of the second world war, when industry had to be reorganised to meet peacetime needs and we in Britain depended on Marshall aid, we still managed a massive house-building programme. In the 1960s, people believed that, in another 10 years, Scotland's housing problem would be cracked. How wrong could everyone have been? Today, in addition to the damp and dangerous housing that people are forced to live in, houses are lying empty because they are in an unlettable condition and the councils have no money to improve them. Councils do not like to have houses lying empty. They do not deliberately leave them unlet, but they do not have the money to make them fit to let. What a waste.
The Minister has seen in my constituency an area of housing, of sound construction, which has deteriorated through lack of investment, to the point where demand is nil and nearly everyone wants out. For want of necessary


investment, the council may be forced to pull the houses down. If the Minister does not find that a shocking waste of public money, I do. It is no use him shrugging off responsibility on to the councils, saying that each council decides its own priorities. Of course they do, but there is a limit to what they can achieve with the funds at their disposal, which do not come anywhere near meeting their housing needs. Glasgow's current HRA debt is no less than £1,111 million, yet its HSG for this year is a mere £11.1 million. With that level of financial support, when will it ever get over its debt crisis?
The Minister knows all this perfectly well. Possibly he wants to do good and make a name for himself as one of Scotland's great housing Ministers. [Laughter] I thought that hon. Members would like that. But the Minister is tied down by the Tory ideology that has sacrificed everything—even the health of thousands of our children—in the cause of reducing inflation. The truth is that our country cannot afford to allow so many of our children to grow up in poverty and ill health—in such damp and dreadful housing—and so many of our work force to have their skills unused.
Bad housing is not something to tolerate; it is an evil to exterminate. It is a sad fact that the Government bear a grave moral responsibility for all these years of criminal neglect.

Mr. Bill Walker: One thing that can be said about the speech by the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) is that it was most certainly read. Another is that it was very badly read. She wrote it before hearing what the Minister had to say, and not knowing that the Chair would be occupied by you, Mr. Deputy Speaker, whom she addressed incorrectly.
The hon. Lady's remarks made it very clear that she still has no idea about finance. It is fascinating. I long for the day when every property is leased or rented at its correct rental value. That value will be pitched at such a level as to ensure that the property is maintained throughout its buyable life. This is perfectly proper and simple to do, but it was not done under the system of housing support grant. When that grant was the main source of support for housing, local authorities used rents as a means of buying votes. I make no apology for saying so. Under the system whereby all rents were charged properly, at a level that would allow building to be properly sustained, housing benefit could be paid to those who could not pay the rent. The marvellous thing about housing benefit is that it is directed at individuals' needs.
The hon. Member for Maryhill drew attention to what she described as a reduction of £1,500 million in housing support grant. But she failed to say that during the same period housing benefit increased by far more than that. Today, many more people are affected—quite properly. I do not argue with that fact. Throughout my political life I have always argued that every family should at least have a proper house to live in. I believe that we all agree about that. The question is how to arrive at that goal.

Mr. John McAllion: Will the hon. Gentleman give way?

Mr. Walker: I am always willing to give way to the hon. Member for Dundee, East.

Mr. McAllion: If the hon. Gentleman genuinely believes that every family should have a house to live in, does he agree that the last thing that any United Kingdom Government should allow is the disconnection of water and sewerage services from a house? That makes the house unfit for human habitation, and therefore makes ordinary people homeless.

Mr. Walker: It will not surprise the hon. Gentleman to hear that I take a different view. I believe that unless disciplines and pressures are imposed on some people, those people will abuse the system. People who, for whatever reason, cannot control their finances may require assistance to be provided in other ways. I have not argued with that idea because, unfortunately, there are people who need to be looked after. But because one wants to look after that particular group of people—

Mr. Jimmy Wray: Will the hon. Gentleman give way?

Mr. Walker: In a minute.
Because one wants to look after that particular group of people, one should not lay the way open. Anyone who has lived on a council estate knows that the people who live there will be able to say who all the individuals beating the system are—which people are enjoying the benefits of the welfare state, extracting all that they can out of it and deliberately and fraudulently claiming more than—[HON. MEMBERS: "Oh."]—Oh,yes.Anyone who has lived on a council estate knows that people can tell you who the cheats are. The hon. Member for Dundee, East knows that the people on the estates know who the cheats are, because he knows that in places such as Linlathlen the people can say who properly requires assistance, and should get it, and who is drawing unemployment and social security benefits and working on the side.

Mr. McAllion: Will the hon. Gentleman give way?

Mr. Wray: Will the hon. Gentleman give way?

Mr. Walker: I shall give way.

Mr. McAllion: rose—

Mr. Wray: rose—

Mr. Deputy Speaker: Order. It is not entirely clear to which hon. Gentleman the hon. Member for Tayside, North is giving way.

Mr. Walker: I was giving way to the hon. Member for Dundee, East.

Mr. McAllion: Like the hon. Member for Tayside, North, I accept that the people in Linlathlen can tell cheats from honest people. That is why, when the hon. Gentleman stood in Dundee, East, he was resoundingly defeated—by the voters of Linlathlen.

Mr. Walker: Of course—the Scottish National party, not the Labour party, defeated me. I stood against a sitting Scottish National party Member of Parliament, and I did not win. If the hon. Member for Dundee, East wishes to stand in Tayside, North, I can guarantee that he will be lucky not to lose his deposit.
We need a system whereby the nation's finances are used for the benefit of people in need—although we may disagree about how we want to achieve that—and people in need must really be assisted. I remember the so-called grand old days—both before the war and immediately after the war, or whenever—and the system then did not produce the necessary goods.
That is why it is essential that we try constantly to find ways of improving on what has been done in the past. I welcome the move towards housing associations, but it would be a mistake to imagine that they alone can find the answers to all our housing problems.

Mr. Wray: Does the hon. Gentleman remember the 1960s when private landlords were signing over the tenancies of buildings? They were involved in Rachmanism for years. The local authority in Glasgow spent millions of pounds on demolishing tenements when the owners ran to different countries. Does the hon. Gentleman realise that under the Public Health Act 1897 thousands of certificates of disrepair were issued by the local authority to get landlords to do the necessary work? Does he remember recently, with the abolition of the rates, private landlords running round trying to get their tenants to sign for increases because they did not want to give them the rate rebates?

Mr. Walker: I need no lessons from the hon. Gentleman on caring about people who live on council estates. I too could draw on lessons from the period that he is talking about. What about the housing blocks, built by the local authority, which were unsuitable for Scotland's climate and which had to be destroyed? What about the housing estate which nobody ever lived in and which had to be demolished? That was a waste of public money. I hope the hon. Gentleman will agree that we have to learn from the lessons of the past. The hon. Gentleman should not wish his party to live in the past. I do not wish my party to live in the past.

Mr. Gallie: My hon. Friend is right to suggest that we should learn from the past. May I refer to the comments by the hon. Member for Glasgow, Provan (Mr. Wray) about tenements in Glasgow and the position since 1979? I want to draw his attention to the amazing progress by the Government on the renovation of old properties in Glasgow over the past 10 years.

Mr. Walker: My hon. Friend has drawn attention to the massive public funds that have properly gone into the centre of Scotland's cities. We had an inheritance; all it required was adequate funding to bring it into modern use. The buildings were built to last, like castles, but sadly they lacked modern conveniences. The money given by the Government has made a huge contribution to the city centres of Edinburgh, Glasgow and Dundee. The results are there for anyone to see.

Dr. Godman: rose—

Mr. Walker: Other hon. Members wish to speak. If I keep giving way, no one else will get in.
I want to bring one matter to the attention of my hon. Friend the Minister. Let us assume that a family is living in a property owned by a local authority and enjoys tenants' rights. If the property is affected by a compulsory purchase order because of a road scheme, the tenant will have to move. Other agencies will be involved. My hon.

Friend should recognise that there are lessons to be learnt because the tenant may find that things get out of control. The district valuer will have to assess that tenant's rights and arrive at a judgment because the building is to be demolished. The value of the property is known, as are the years of rights and what the value would be after taking account of discounts. Surely it should not be too difficult to arrive at a sensible value.
I hope that the lessons of a particular issue will be borne in mind by my hon. Friend the Minister, who will have to take some decisions. I hope that the House will understand that there was a particular matter that I wished to bring to its attention.

Mr. Michael J. Martin: The hon. Member for Tayside, North (Mr. Walker) talks about local authority housing and buildings of modern design. In that context he talks about Glasgow, but he omits to tell the House that a Tory Government told local authorities such as Glasgow, an area in which my mother and many others were desperate for a home, that if they did not build non-traditional homes they would receive no grant. Councillors who were dedicated to house building in Glasgow and other major cities told the Government,"You are wrong; you are planting problems for future generations."

Mr. Bill Walker: Will the hon. Gentleman give way?

Mr. Martin: I shall not give way because I know that many hon, Members wish to speak.
The hon. Member for Ayr (Mr. Gallie) goes back 14 years to talk about rehabilitation. If he visits the Glasgow collection in the Mitchell library he will learn that the Glasgow local authority was involved in the rehabilitation of tenements at Port Dundas in my constituency as long ago as 1910. In 1973, as a young councillor in Govan, I was involved in the rehabilitation of tenements in the Govan road.
Ministers are so often singing the praises of Scottish Homes, and after the local authority in my constituency—it is probably the position throughout the country—it is the largest landlord. There are multi-storey flats in which it is a treat to live. However, the tenant of a local authority, whatever its faults, can approach an elected councillor, and through him he can approach me. More important, a local councillor can contact every senior official in the authority. With Scottish Homes, a tenant will be able to speak to a junior official, but that will be the end of the story.
We have heard about quangos and Government appointments. It is time that people who know something about tenants' problems were appointed to the board of Scottish Homes. This year, rents increased by 9 per cent. They increased by 9 per cent. last year, as they did the year before that. The Conservatives appoint managers and then they step back, as they would with big business. They should remember that not everyone in the public sector is in a position to buy his home, no matter how cheap the price at which it is offered. Some tenants want to continue to rent because of personal circumstances or a feeling of insecurity. The tenants of Scottish Homes are paying higher rents than any imposed by a local authority throughout the country. I defy any Conservative Member to dispute that.
The attitude at the top of Scottish Homes is deplorable, and it permeates the whole organisation. I have two letters with me and another dozen in my office which all say the same thing: "Thank you for writing to Sir James Mellon. Unfortunately, he is in London at the moment and cannot reply to your letter." Would any of us get away with saying, "I am in London at the moment and cannot reply to my constituents"? It is as well for Sir James Mellon that he was appointed and does not have to stand for office.
As I said, that attitude is in evidence throughout the organisation. In my constituency, as in all hon. Members' constituencies, anti-social behaviour is becoming a problem on almost every housing estate. Those at Scottish Homes are taking the attitude that they are not police officers and that they do not want to become involved. That is disgraceful. Scottish Homes is about more than the provision of homes. Skill should be exercised in managing estates. If people have beautiful homes but are ashamed to take their relatives into the community because of the anti-social behaviour that is taking place around them, the landlord, Scottish Homes, should be prepared to do something about their miserable plight.
Scottish Homes takes too little account of what is going on in the community-based housing associations—the other sector in which it is involved. There are good community-based housing associations and no one has any complaints about them. But if the things that are going on in some of the community-based housing associations were going on in a local authority, the hon. Member for Dover (Mr. Shaw) would be standing up and attacking us about it.
I think that I shall write to the Minister about the case that I have in mind because I am getting no satisfaction on it from the director of Scottish Homes. I refer to the case of an owner-occupier of a property in one of my community-based housing assocations, whose home has been flooded five times through no fault of her own. No compensation was granted to her until I went up from London to appeal to a community-based housing association committee. It was touch and go whether I got a hearing. Were it not for some of the fair-minded people on that committee, I should not have been given a hearing. To rub salt into the wound, when I wrote to Sir James, he told me that I must give credit to the association because it had eventually paid compensation. The point is that it paid compensation only after I had made two trips to see it.
Great play has been made of the right to buy. I inform the House that, until I made representations, tenants in my constituency were losing their secure tenancies because they had medical problems. One woman whose young child suffers from a serious illness asked for a ground floor tenement flat for the benefit of that child. She was told by the association in question that, if she did not sign on the dotted line, she would not get to move, and that if she signed, her tenancy would change from a secure tenancy to an assured tenancy. In shorthand, that means being denied the right to buy. I have made representations to the assocation and to Scottish Homes, which will not do anything about the matter. I hope that when I give the Minister the details, he will do something about it.
I recall a case not so long ago when a community-based housing association in my constituency decided to take

over the old Springburn hall, do it up and sand blast it. I said that was nice because the community would have a place to hold socials, the local Labour party would be able to have a wee dance, and anyone who wanted to hold a wedding there would be able to do so. I was told, "No, this will be done up with Government funding, urban aid and so on and then sold off as offices to the highest bidder in the private sector." What sort of community-based housing association is that? It must be losing touch with the people who elected its members if that sort of thing happens.
I am glad to have the opportunity to raise this matter. It was put to me by a senior official in Scottish Homes in the west of Scotland that, because of the way in which I made representations to the community-based housing associations, I was putting undue pressure on them and he might simply decide that he would take away funding and projects from my constituency because of my behaviour. I do not know a great deal about parliamentary privilege — I may be able to get advice from the Clerks of the House — but I know that it is certainly verging on a breach of parliamentary privilege when I am told that my constituents will suffer because of the way in which I conduct myself. I do not think that anyone would say that my behaviour inside the House and outside was anything but blameless. I have never attacked officials without warrant.
The Minister, as the person in charge of Scottish Homes, should start at the top and cut his way down. He should get his act together.

Mr. Phil Gallie: 1 shall be reasonably brief. In examining housing support, we must look at the changing scene in housing. In 1979, only 35 per cent. of homes in Scotland were privately owned. At present, 54 per cent. are privately owned. Obviously, that reflects the change in housing support grants. Almost a quarter of a million houses have moved out of local authority control, which means that not quite so much cash is required to go back into the public coffers.
Changes have been made to the way in which houses are maintained by Scottish Homes. I am sad to hear the comments made by the hon. Member for Glasgow, Springburn (Mr. Martin). Happily, I have not had such problems in my constituency, but I sympathise with him. Changes have been made to housing associations and housing co-operatives; surely we must welcome them. We welcome the involvement of tenants and others who get involved in the good and sensible provision of public housing and its maintenance. It does much for the quality of life and the local environment in which people live. A pride is established within communities.
When we examine the background to the £36 million which is allocated to the housing support grant, there is another side to the story. I refer to the housing benefits in Scotland. There has been a policy change from zero to almost £1 billion in the current year. That will mean that housing will be funded in a different way. People will be given responsibilities and be required to pay reasonable rents. Those who cannot afford to pay will be covered by the figure of almost £1 billion which is being made available through housing benefits.
I draw attention to the reference by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) to


the rents charged by the Kyle and Carrick regional council. Kyle and Carrick does not receive any housing support grant for its general housing provision. I am happy to say that it receives cash for the hostels. That is welcome. I look to my hon. Friend the Minister to ensure that in future he treats Kyle and Carrick in a special way, because there is a real need to deal with the problems of homelessness in Kyle and Carrick.

Mr. Foulkes: Will the hon. Gentleman give way?

Mr. Gallie: I shall stick with the problems of Kyle and Carrick.
I suggest that the rise in rents stems from the inadequate repairs and maintenance programme that the Labour administration has carried out in recent years. The rise in rents that is currently required—

Mr. Foulkes: Will the hon. Gentleman give way?

Hon. Members: Give way.

Mr. Gallie: I will give way in the same way as the hon. Member for Fife, Central (Mr. McLeish) showed me courtesy when I sought to intervene in the previous debate.
One of the problems which the new administration of Kyle and Carrick district council faced when it took over the reins in May this year was, as my hon. Friend the Minister said, the deliberately suppressed rents that had been established in election year by the previous Labour administration. My hon. Friend the Minister should take that point on board.

Mr. Foulkes: Will the hon. Gentleman give way?

Mr. Gallie: I will not give way, but I shall sit down and allow other hon. Members to participate in the debate.

Several hon. Members: rose—

Mr. Deputy Speaker: Order. It is not entirely clear to whom the hon. Gentleman is giving way.

Mr. Gallie: I said that I would not give way but simply take my seat and allow another Member to speak in this important debate.

Mrs. Ray Michie: That is an interesting speech to follow. The hon. Member for Ayr (Mr. Gallie) sounded optimistic about the figures. I find the housing support grant figures for the next financial year gloomier than ever, as more district councils are pushed out into the cold. Four have been added to the list of those not in receipt of the general portion of housing support grant. Those still in receipt of the grant are once again seeing a reduction. As the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) said, last year the total payable was £47 million. This year, it is reduced to £36 million. That is a far cry from the £213 million in 1979. Still housing remains a huge problem the length and breadth of Scotland.
I should like to take Inverness as an example. It is estimated that the rent increases required to compensate for the reduction in housing support grant will be about 6.5 per cent. I know that other councils will have to increase their rents by 10, 11 or even 12 per cent. In preparing the estimates of income and expenditure, I believe that the Secretary of State is supposed to take into account the general level of earnings. With an increase in

unemployment in the highlands, that is cold comfort indeed. That issue does not appear to have been addressed following the closure of McDermott's yard. Even for those in employment, wages are being kept to a minimum, with public sector pay restraint making it difficult to meet the rent increases.
The housing waiting list in Inverness is approaching 3,000. Waiting times for single people can be more than six years, and between three and four years for couples. In Gordon district, the waiting list is almost 2,000 and growing fast, while there are only 5,500 council houses and more than half the current council house vacancies are going to local people.
My constituency of Argyll and Bute will get no housing support this year, which is an incredible situation for a district council struggling with waiting lists. The average wait is anything from two and a half to four and a half years, against a background of rising homelessness. The only light in the gloom is the hostel portion of the grant, that has been awarded to Argyll and Bute, and I welcome that.
The number of homeless varies in different parts of Scotland, but it does not matter to each homeless person whether they are homeless in Glasgow or Lochgilphead—the reality is the same. In a civilised society, it should be a basic right for people to have shelter.
There are no grants for Argyll and Bute—with all its islands—and cuts in similar geographic areas such as Orkney and Shetland. Surely that does not reflect the fact that building, repair and maintenance costs on the islands are between 30 and 40 per cent. above the average on the mainland.
That brings me to the island of Bute. The Minister knows of my concern about Rothesay and the dilapidated state of many of the houses and commercial premises in the heart of the town. It is a beautiful island, with a hardy community struggling in a cruel financial climate. The potential for tourist development is enormous, but buildings are collapsing and have to be shored up before they are demolished, and nothing is put in their place. It is dispiriting and no one—I have been to both the Minister and the Secretary of State—appears to be able to help. Scottish Homes promised me three years ago that it would declare Rothesay a small urban renewal initiative area, but it never happened.
There is not enough good-quality low-cost housing available for rent or ownership. Too many local people have been priced out of the market, especially in rural areas of Scotland. The proliferation of holiday homes adds to the problem.
The new council tax will mean a decrease in revenue for local authorities, because it allows a 50 per cent. discount on such homes—in Wales, it can be 25 per cent. or none. There are different sorts of holiday home owners: those who use them once or twice a year and others who rightly want to retain the family home with a view to retiring to the place in which they were born and brought up. Others, who have a modest little place somewhere in a place like Tighnabruaich or Rothesay, often come from Paisley, Glasgow or Renfrew—they are not wealthy people, but come regularly every weekend and become very much a part of the community and contribute to it. They deserve to be able to have their weekends at the seaside.
In Committee on the council tax legislation, I tried to persuade the Minister to allow local authorities discretion on the amount of discount given for holiday homes, as


they did with the poll tax, but that was not accepted. I understand that the response of the Scottish Office to representations from local authorities, particularly in the Highland region, on discretion with regard to the council tax is that it believes that the regulations are fair. They are not.
I make a specific request of the Minister tonight: will he undertake to look again at giving local authorities discretion in the matter of council tax on holiday homes? Those authorities are best placed to decide the level of discount, and should be allowed to do so. I hope that the Minister will take that request seriously. The Minister and the Secretary of State may recall that, after the poll tax was introduced, it was agreed that the authorities should have discretion, and I ask the Minister to consider adopting the same policy on the council tax.

Mr. Mike Watson: I have listened to the debate with interest, particularly the contribution of the hon. Member for Ayr (Mr. Gallie). I am not sure whether he meant to contribute to this debate, but he is nothing if not interesting—[Interruption.] That was not meant to be insulting. I would not object to being called interesting, and I meant the comment to be taken in that way.
The Minister is also an interesting individual. He started with an interesting comment when he said that the orders represented a generous settlement. To put a kind interpretation on those words, he can only have meant that the orders were going to be much worse and, after some infighting behind the scenes, the current figures are better than those that were originally intended. However, I doubt whether that was the case. The Minister and his colleagues do not normally allow the facts to get in the way of a good story.
The orders will result in an overall cash reduction of £56 million for housing throughout Scotland in the coming year—a cut of 12 per cent. If one also takes account of the rise in the cost of living, which should have been built into the figures, one discovers a £70 million shortfall and a 15 per cent. cut. That does not even take into account the 10 per cent. reduction in the amount that can be spent on the vital task of improving the housing stock.
The capital consents figure of £385 million depends on 65 per cent. of that figure being raised from council house sales. Whatever one's view of council house sales, everyone knows that the best of the stock has long since been sold. Those that are left are hardly the most attractive houses. In addition, there is mass unemployment and we are at the height of a recession, so there will be nowhere near as many council house sales in the coming year. The figure is grossly exaggerated and overestimated, which will mean a further shortfall in the overall statistic.
The Minister talked of the variation order that he might introduce if the cost of living rose more than he has anticipated. He should be prepared to introduce a variation order if the sale of council houses does not reach the level that he has estimated; otherwise, his proposal will be meaningless. Meanwhile, repairs will not be carried out, new houses will not be built and dampness will not be

treated. The Government's priority seems to be to sell more and more houses, to contract out housing management and to cut resources.
That policy is not a surprise, as we have seen the pattern over the 13 years that the Government have been in power. One of the most serious aspects of the underfunding of housing through local authorities is the effect that the cuts and the under-provision will have on various agencies. Those agencies are funded by local authorities and attempt to deal with the growing problem of homelessness in Scotland. Glasgow has the highest incidence of applications from homeless people in the country. Although it has only 13.5 per cent. of the country's population, it has twice that percentage of Scotland's homeless applications.
We must be clear about the sort of people that the agencies assist. Many of them are in the 16 to 25-year-old age bracket and the majority are homeless because their families or friends whom they were staying with have become unable or unwilling to continue to house them. Those people are out on the streets for one reason or another—ultimately, the reason is not important. The statistics highlight the pressures placed on many young people today. They have no homes or jobs and they are increasingly unable to find training places. At 16 and 17 they receive no benefits, and they get only graded benefit payments up to the age of 24.
Meanwhile, more than 250,000 homes are severely blighted by damp in Glasgow. I and other Glasgow Members hear their stories every week in our surgeries, but we cannot effectively deal with their problems because the local authorities do not have the repairs grants to deal with them.
A greatly increased repairs budget, vital for all major cities and conurbations in Scotland, is further proof of the problem. The problems of homelessness continue to multiply. They are, if not disregarded, certainly downgraded by the Minister. The Government reduce the resources available to local authorities and that, in turn, hits the agencies that are trying manfully to stem the tide of homelessness.
One of the agencies in my constituency is an innovative organisation called the Glasgow Council for Single Homeless. It has been in existence for some years now and it is jointly funded by the city council housing department and the regional council social work department. It is performing a vital task, yet the 1992 report highlighted evidence of the continually growing number of young people referred to its city centre initiative and stopover project—two projects set up under the auspices of the Glasgow Council for Single Homeless, which is directly responsible, because of its grant aid, to local authorities.
The city centre initiative is now under direct threat. It is a good example of the co-ordinated inter-agency approach. It involves not just the social work department but the community education department of the regional council, the Glasgow Council for Single Homeless and the YMCA. Its multi-disciplinary approach is so often necessary to provide resources and to deal effectively with all aspects of the problem of young single homeless people.
The city centre initiative is a prime example of the radical approach that agencies and the local authority in Glasgow have used to deal with housing problems in general and the homelessness problem in particular. This valuable agency is now under serious threat. In March 1992 the Glasgow Council for Single Homeless was struck


a body blow when it was told by the city council's housing department that its grant was to be reduced by 67 per cent., from £60,000 to £20,000 this year. Staff had to be laid off and that meant that fewer homeless people could be catered for. The decision was taken reluctantly by the housing department, doubtless as a direct result of the financial pressures applied to the council by Government cuts.
Things will get worse in the coming year. Discussions have been held to offset the worst effects on the council for single homeless, but its director was recently issued with her redundancy notice, and it is only a matter of time before the organisation goes under—unless someone comes to the aid of the local authority and provides more funds. Its future is highly uncertain and if it goes under, that will be a tragedy.
Originally the stopover project was unique, but I understand that there is also one in Dundee now—that city faces similar problems. The project was set up to help young homeless people who are on their own, many of them sleeping rough. The project provides crisis accommodation for them for up to 10 weeks. If, because of the reduced finances allowed for in this order, that accommodation disappears, the stopover project could easily go under, and another vital agency and its work will disappear.
Many of these people have nowhere else to go. We may forget care in the community—it has not started yet. These youngsters are the flotsam and jetsam of Glasgow and the surrounding areas and they need this help, if only for short periods.
Will the Minister intervene to ensure that the stopover project and the Glasgow Council for Single Homeless are guaranteed funds to enable them to continue? If the Government allow them to go under, it will prove that they are completely out of touch with the problems of the people whom they seek to represent.
The Government do not have their finger on the pulse of Scotland. They do not represent the people of Scotland and they have no feeling for their problems. If the Minister and the Department cannot deal meaningfully with the housing problems of the people of Scotland and provide them with adequate resources to be decently housed in accommodation that is affordable and fit to live in, he should stand aside and make way for a party that will do just that.

Mrs. Fyfe: Tonight, my hon. Friend the Member for Glasgow, Springburn (Mr. Martin) showed real knowledge of housing realities—unlike Conservative Members who spoke. The hon. Member for Argyll and Bute (Mrs. Michie) said rightly that many councils do not receive any housing support grant—and her own receives grants only for hostels.
My hon. Friend the Member for Glasgow, Central (Mr. Maxton) drew attention to the plight of the young homeless. Hon. Members on this side of the House displayed their knowledge of the subject and proved that they are well aware of the realities.

Dame Elaine Kellett-Bowman: On a point of order, Mr. Deputy Speaker.

Mr. Foulkes: She has just woken up.

Dame Elaine Kellett-Bowman: I was here the whole time and heard every word. Did the hon. Lady ask leave of the House, Mr. Deputy Speaker?

Mr. Foulkes: Yes.

Dame Elaine Kellett-Bowman: I did not hear her do so. If she did not ask leave of the House, I object.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Mrs. Maria Fyfe.

Dame Elaine Kellett-Bowman: No, Mr. Deputy Speaker, excuse me—

Mr. Deputy Speaker: Order. Mrs. Fyfe.

Dame Elaine Kellett-Bowman: The hon. Lady did not ask leave of the House, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. The hon. Lady certainly did not ask leave of the House, but it is too late now. Mrs. Fyfe.

Mrs. Fyfe: Some of us, Mr. Deputy Speaker, have more serious matters on our minds than trivial details of procedure. If the hon. Lady had managed to remain awake during some of the speeches, I would have some respect for her remarks now.
Hon. Members on this side of the House showed real concern and a genuine knowledge of Scottish housing issues. We were not so fortunate in listening to the contributions of Conservative Members—and that latest intervention was particularly inept and ill-advised.
The hon. Member for Tayside, North (Mr. Walker) had nothing to say and took 13 minutes to say it. Of course housing benefit expenditure has increased—that is because more and more people are out of work. Does he not realise that those who receive it have all or some of their rent paid from housing benefit? By the time that it has paid off a proportion of housing debt and for housing management, precious little is left to pay for repairs to the fabric of properties, which is why council housing stock is in such a drastic state.
The hon. Member for Ayr (Mr. Gallie) spoke of Scotland's changing housing scene. He was dead right about that. Homelessness has reached record levels. This year is worse than last year, and worse than the year before that. That is the situation over which the Government preside.
Conservative Members do not address the issues. Do they not realise, and do they not care, that families are growing up in unhealthy housing? What chance in life do youngsters have when they have to grow up in damp and overcrowded housing and suffer chest infections? More and more single mothers are suffering depressive illness because of the condition of their homes and the poverty in which they live.
Conservative Members cannot claim that they believe in everyone being provided with a decent home and at the same time vote for housing support grants that are so inadequate that they are a joke.
We were given one and a half hours to debate Scotland's housing crisis. We need a Scottish Parliament, so that we may debate that issue properly and treat it with the seriousness that it deserves, so that we may restore to local councils the authority to govern their localities and not be kicked around by this Government.

Lord James Douglas-Hamilton: I will read Hansard tomorrow, in case I do not answer in the few moments that are left to me all the points that were made.
The hon. Member for Glasgow, Springburn (Mr. Martin) asked various questions about Scottish Homes. I shall suggest to its chairman that he should meet the hon. Gentleman. While my right hon. Friend the Secretary of State has powers of direction, that is a heavy-handed measure to use. It has not been employed yet, and I invite the hon. Gentleman to follow up his points at a meeting. If he does not receive satisfaction—but I hope he will—he can come back to me.
The hon. Member for Glasgow, Maryhill (Mrs. Fyfe) asked whether we could write off local authority capital debt. Unfortunately, we cannot. Local authorities with high levels of capital debt receive housing support grant to help them to service that debt through the loan charges that fall on the housing revenue account. Given that assistance, authorities secure enough income to meet the costs associated with council housing.
I should point out to the hon. Lady that there is no evidence that Glasgow's debt in relation to council housing exceeds the value of that council housing. I therefore see no particular reason why the national taxpayer should be expected to meet the cost of writing off the capital debt when, in any case, the sums involved would be enormous. I can tell the hon. Lady, however, that the results of the Scottish national house condition survey will be out quite soon—this year—and will be enormously helpful in pointing the way to effective targeting of resources in the future.

Mr. Maxton: Will the Minister give way?

Lord James Douglas-Hamilton: I will give way to the hon. Gentleman, because I know that he is very enthusiastic about this subject. First, however, let me tell my hon. Friend the Member for Tayside, North (Mr. Walker) that I am aware of the case that he mentioned, and will keep a close eye on it. I hope for a satisfactory resolution of his constituent's affairs.

Mr. Maxton: I am delighted to learn that the house condition survey is to be published at long last. Some of us suggested such a survey, and moved amendments to Housing Bills, back in the early 1980s. I was also delighted to hear the Minister say that the survey's publication would allow him to target resources where they are most needed. Will he guarantee that resources will be made available to deal with the condition of housing in Scotland, as revealed by the survey?

Lord James Douglas-Hamilton: The results of the survey will provide reliable information on a national scale. There will continue to be a need for detailed information at local level, but we encourage local authorities to carry out local survey work, as has happened in the hon. Gentleman's authority. In some cases, if local authorities require assistance with that work, Scottish Homes may be able to help. Authorities should consider working in close co-operation with Scottish Homes.
The hon. Member for Argyll and Bute (Mrs. Michie) raised the issue of Rothesay. The provisional allocation for her council is £5·8 million, which is substantial. It is within the council's discretion whether to make Rothesay a priority, but I am glad to note that it has made a strategic

agreement with Scottish Homes. I hope that that will help it to proceed with the matter. The other point that the hon. Lady raised, relating to council tax on holiday homes and the question of discretion, is a matter for my hon. Friend the Member for Eastwood (Mr. Stewart), and I shall refer it to him.
The hon. Member for Glasgow, Central (Mr. Watson) raised the issue of the Glasgow Council for Single Homeless and its stopover project. He did not raise the question of urban aid, which gives considerable assistance; but, from what he said, I do not think that that is necessarily appropriate in this instance. I understand that the projects concerned are funded by the authority, and future grants are a matter for the district council. We have made clear our concern for the homeless by providing additional capital allocations of some £22·6 million in the past two years.
My hon. Friend the Member for Ayr (Mr. Gallie) is right: the rents charged in his authority were well below the national average, and the council clearly took that into account in fixing levels.
We will take into account the level of council house receipts from the right to buy, and we shall bear in mind the needs of authorities that do not reach the receipt targets that are anticipated. In the past, when we have been in a position to make supplementary allocations, we have taken that need into account.
I strongly support the order, and I warn the Opposition that, should they have it in mind to vote against it, they will deprive local authorities of millions of pounds. I leave that thought with them.

Question put:

The House divided: Ayes 190, Noes 144.

Division No. 158]
[12.04 am


AYES


Ainsworth, Peter (East Surrey)
Cran, James


Alexander, Richard
Currie, Mrs Edwina (S D'by'ire)


Alison, Rt Hon Michael (Selby)
Davies, Quentin (Stamford)


Allason, Rupert (Torbay)
Day, Stephen


Amess, David
Deva, Nirj Joseph


Arbuthnot, James
Dicks, Terry


Arnold, Jacques (Gravesham)
Douglas-Hamilton, Lord James


Arnold, Sir Thomas (Hazel Grv)
Dover, Den


Atkinson, Peter (Hexham)
Duncan, Alan


Baker, Nicholas (Dorset North)
Duncan-Smith, Iain


Banks, Matthew (Southport)
Elletson, Harold


Bates, Michael
Fabricant, Michael


Bellingham, Henry
Fenner, Dame Peggy


Beresford, Sir Paul
Forman, Nigel


Bitten, Rt Hon John
Forsyth, Michael (Stirling)


Blackburn, Dr John G.
Fox, Dr Liam (Woodspring)


Booth, Hartley
Freeman, Roger


Boswell, Tim
French, Douglas


Bottomley, Peter (Eltham)
Gale, Roger


Bowden, Andrew
Gallie, Phil


Bowis, John
Gardiner, Sir George


Brandreth, Gyles
Gill, Christopher


Brazier, Julian
Gillan, Cheryl


Bright, Graham
Goodson-Wickes, Dr Charles


Brooke, Rt Hon Peter
Gorst, John


Browning, Mrs. Angela
Greenway, Harry (Ealing N)


Butcher, John
Greenway, John (Ryedale)


Butler, Peter
Griffiths, Peter (Portsmouth, N)


Carlisle, Kenneth (Lincoln)
Hague, William


Carrington, Matthew
Hamilton, Rt Hon Archie (Epsom)


Clappison, James
Hamilton, Neil (Tatton)


Clifton-Brown, Geoffrey
Hannam, Sir John


Coombs, Anthony (Wyre For'st)
Hargreaves, Andrew


Coombs, Simon (Swindon)
Harris, David


Cope, Rt Hon Sir John
Hawkins, Nick


Couchman, James
Hawksley, Warren






Heald, Oliver
Pickles, Eric


Heathcoat-Amory, David
Porter, David (Waveney)


Hendry, Charles
Renton, Rt Hon Tim


Hill, James (Southampton Test)
Richards, Rod


Horam, John
Riddick, Graham


Hordern, Rt Hon Sir Peter
Roberts, Rt Hon Sir Wyn


Howarth, Alan (Strat'rd-on-A)
Robertson, Raymond (Ab'd'n S)


Howell, Rt Hon David (G'dford)
Robinson, Mark (Somerton)


Hughes Robert G. (Harrow W)
Rowe, Andrew (Mid Kent)


Hunt, Sir John (Ravensbourne)
Ryder, Rt Hon Richard


Hunter, Andrew
Sackville, Tom


Hurd, Rt Hon Douglas
Sainsbury, Rt Hon Tim


Jack, Michael
Scott, Rt Hon Nicholas


Jenkin, Bernard
Shaw, David (Dover)


Jessel, Toby
Shaw, Sir Giles (Pudsey)


Jones, Gwilym (Cardiff N)
Shepherd, Colin (Hereford)


Jones, Robert B. (W Hertfdshr)
Sims, Roger


Jopling, Rt Hon Michael
Smith, Sir Dudley (Warwick)


Kellett-Bowman, Dame Elaine
Smith, Tim (Beaconsfield)


Kilfedder, Sir James
Soames, Nicholas


King, Rt Hon Tom
Spencer, Sir Derek


Kirkhope, Timothy
Spicer, Michael (S Worcs)


Knapman, Roger
Spink, Dr Robert


Knight, Greg (Derby N)
Spring, Richard


Kynoch, George (Kincardine)
Sproat, Iain


Lait, Mrs Jacqui
Stanley, Rt Hon Sir John


Lang, Rt Hon Ian
Stephen, Michael


Lawrence, Sir Ivan
Stern, Michael


Legg, Barry
Stewart, Allan


Leigh, Edward
Streeter, Gary


Lidington, David
Sweeney, Walter


Lightbown, David
Sykes, John


Lilley, Rt Hon Peter
Taylor, Ian (Esher)


Lord, Michael
Taylor, John M. (Solihull)


Lyell, Rt Hon Sir Nicholas
Temple-Morris, Peter


MacGregor, Rt Hon John
Thomason, Roy


Maclean, David
Thompson, Patrick (Norwich N)


Madel, David
Thornton, Sir Malcolm


Maitland, Lady Olga
Thurnham, Peter


Malone, Gerald
Townend, John (Bridlington)


Mans, Keith
Townsend, Cyril D. (Bexl'yh'th)


Marland, Paul
Tredinnick, David


Martin, David (Portsmouth S)
Trend, Michael


Mates, Michael
Twinn, Dr Ian


Mawhinney, Dr Brian
Walker, Bill (N Tayside)


Merchant, Piers
Waller, Gary


Milligan, Stephen
Wardle, Charles (Bexhill)


Mills, Iain
Watts, John


Mitchell, Andrew (Gedling)
Wells, Bowen


Moate, Sir Roger
Wheeler, Rt Hon Sir John


Monro, Sir Hector
Whitney, Ray


Moss, Malcolm
Whittingdale, John


Needham, Richard
Widdecombe, Ann


Nelson, Anthony
Willetts, David


Neubert, Sir Michael
Wilshire, David


Nicholls, Patrick
Wood, Timothy


Nicholson, David (Taunton)
Yeo, Tim


Norris, Steve



Page, Richard
Tellers for the Ayes:


Patnick, Irvine
Mr. Sydney Chapman and


Pattie, Rt Hon Sir Geoffrey
Mr. Andrew MacKay.


NOES


Adams, Mrs Irene
Benn, Rt Hon Tony


Ainsworth, Robert (Cov'try NE)
Benton, Joe


Anderson, Ms Janet (Ros'dale)
Betts, Clive


Armstrong, Hilary
Blair, Tony


Banks, Tony (Newham NW)
Boateng, Paul


Barnes, Harry
Boyce, Jimmy


Barron, Kevin
Bradley, Keith


Battle, John
Brown, Gordon (Dunfermline E)


Bayley, Hugh
Brown, N. (N'c'tle upon Tyne E)


Beckett, Rt Hon Margaret
Caborn, Richard





Callaghan, Jim
Macdonald, Calum


Campbell-Savours, D. N.
McFall, John


Canavan, Dennis
McKelvey, William


Cann, Jamie
Mackinlay, Andrew


Chisholm, Malcolm
McMaster, Gordon


Clarke, Eric (Midlothian)
Madden, Max


Clarke, Tom (Monklands W)
Mahon, Alice


Clelland, David
Marshall, David (Shettleston)


Clwyd, Mrs Ann
Martin, Michael J. (Springburn)


Connarty, Michael
Martlew, Eric


Cook, Robin (Livingston)
Maxton, John


Corbyn, Jeremy
Michael, Alun


Cox, Tom
Michie, Mrs Ray (Argyll Bute)


Cryer, Bob
Milburn, Alan


Cummings, John
Miller, Andrew


Cunliffe, Lawrence
Moonie, Dr Lewis


Cunningham, Jim (Covy SE)
Morgan, Rhodri


Dalyell, Tarn
Morley, Elliot


Darling, Alistair
Morris, Estelle (B'ham Yardley)


Davies, Ron (Caerphilly)
Mullin, Chris


Davis, Terry (B'ham, H'dge H'I)
Murphy, Paul


Denham, John
O'Brien, William (Normanton)


Dixon, Don
O'Hara, Edward


Donohoe, Brian H.
Olner, William


Dowd, Jim
Pendry, Tom


Dunnachie, Jimmy
Pickthall, Colin


Eagle, Ms Angela
Pike, Peter L.


Eastham, Ken
Pope, Greg


Etherington, Bill
Powell, Ray (Ogmore)


Evans, John (St Helens N)
Prescott, John


Ewing, Mrs Margaret
Primarolo, Dawn


Fatchett, Derek
Purchase, Ken


Flynn, Paul
Quin, Ms Joyce


Foster, Rt Hon Derek
Raynsford, Nick


Foulkes, George
Redmond, Martin


Fyfe, Maria
Reid, Dr John


Galloway, George
Ross, Ernie (Dundee W)


Gerrard, Neil
Rowlands, Ted


Godman, Dr Norman A.
Ruddock, Joan


Godsiff, Roger
Salmond, Alex


Golding, Mrs Llin
Simpson, Alan


Graham, Thomas
Skinner, Dennis


Griffiths, Nigel (Edinburgh S)
Smith, Andrew (Oxford E)


Griffiths, Win (Bridgend)
Smith, Llew (Blaenau Gwent)


Hall, Mike
Soley, Clive


Hanson, David
Spellar, John


Hardy, Peter
Steinberg, Gerry


Heppell, John
Stevenson, George


Hood, Jimmy
Strang, Dr. Gavin


Hoon, Geoffrey
Turner, Dennis


Hughes, Kevin (Doncaster N)
Vaz, Keith


Ingram, Adam
Wallace, James


Jackson, Helen (Shef'ld, H)
Wardell, Gareth (Gower)


Jamieson, David
Wareing, Robert N


Johnston, Sir Russell
Watson, Mike


Kennedy, Charles (Ross,CS)
Welsh, Andrew


Khabra, Piara S.
Wilson, Brian


Kilfoyle, Peter
Wise, Audrey


Kirkwood, Archy
Worthington, Tony


Leighton, Ron
Wray, Jimmy


Lewis, Terry



Livingstone, Ken
Tellers for the Noes:


McAllion, John
Mr. Jack Thompson and


McAvoy, Thomas
Mr. Alan Meale.

Question accordingly agreed to.

Resolved,
That the draft Housing Support Grant (Scotland) Order 1993, which was laid before this House on 21st January, be approved.

Hedgerows Bill [Money]

Queen's Recommendation having been signified—

Motion made and Question proposed,
That, for the purposes of any Act resulting from the Hedgerows Bill, it is expedient to authorise the payment out of money provided by Parliament of—

(a) any expenses of the Secretary of State incurred in consequence of the Act, and
(b) any increase attributable to the Act in the sums payable out of money so provided under any other enactment.—[Mr. Maclean.]

Mr. Peter Hardy: I should like to make a short intervention. It is not my intention to be critical of the Bill or the money resolution, which I accept entirely. I want to raise a relevant point that the Minister might care to consider at this and subsequent stages of the Bill.
Some time ago, the Government accepted that the 4,000 pre-1840 Acts of Enclosure still had effect. If not, the possession of very large areas of lowland England might come into question. Many of the 4,000 Acts required that the fields established from the commons, and passing into the possession of landowners, be surrounded by hedgerows, and the hedgerows had to be perpetually maintained. It would be inappropriate for any public money to be spent by the Secretary of State or by local authorities, in fulfilment of the provisions of the Bill, in seeking to protect hedgerows that the law already required to be protected. Such duplication would be unnecessary and perhaps irresponsible.
I have tabled a couple of amendments, which I trust will cover the point when the Bill reaches the Committee stage. The purpose of this intervention is to ensure that the whole question is properly considered.
I ought to emphasise that local authorities should be aware of the provisions not only of this Bill but also of the 4,000 Acts by which the commons of lowland England were largely enclosed. Local authorities should know the conditions of enclosure and of possession that those Acts created. The matter may before very long be illustrated by a case that has been drawn to the Government's attention by the Yorkshire Wildlife Trust. We await a ministerial reply in that case.
As the matter may be considered briefly in the Standing Committee, it need not be rehearsed here. However, it is appropriate that it be considered, in terms both of the future of this very desirable piece of legislation and of the proper management of public money.
I trust that the Minister will ensure that this matter is taken into consideration, even if not by way of a reply tonight. There ought to be some sort of resuscitation for measures that are still firmly in the statute book but are sometimes forgotten by landowners who may have enjoyed possession for a very long time.

The Minister for the Environment and Countryside (Mr. David Maclean): I give the hon. Gentleman the assurance he seeks. We shall consider the matter very carefully.
Question put and agreed to.

PETITION

Crown Post Office (Prestatyn)

Mr. David Hanson: I wish to present a petition on behalf of 3,500 residents of the town of Prestatyn, which is in my constituency. These people are concerned about the possibility of the Crown post office's being downgraded and privatised. The petition reads:
The proposal by Post Office Counters Ltd to downgrade the Crown post office in King's avenue, Prestatyn, in the borough of Rhuddlan to an agency office run by James Hall (Spa) will lead to a poorer service to the public because of inferior training, lack of job knowledge, experience, dedication and customer relationships of the staff who will replace the current staff. Furthermore, the present business of Prestatyn will be undermined by an unrequired food store, which will have unfair advantage in that the public will have to enter James Hall (Spa) to receive their pensions and benefits.
The petition calls on
the right hon. Michael Heseltine, Secretary of State for Trade and Industry
to intervene in the proposal to downgrade the Prestatyn Crown post office to an agency office. I fully support the petition, and hope that the Prestatyn post office will not be privatised. I am pleased to present the petition.
To lie upon the Table.

A1 (Newcastle Bypass)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]

Mr. David Clelland: I regret to have to bring the issue of the Al Newcastle western bypass before the House in this way, but, having tried to resolve the problems that my constituents have had over the past two years through the normal channels—letters to Ministers and meetings with them—I am afraid that we have reached the stage at which the matter must be debated on the Floor of the House, because we are not resolving the problem. I speak with the full support of my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson), who also has constituents living adjacent to the road who are suffering similar problems.
The problem concerns a grave injustice to my constituents who live in the Woodgrove area of Denton Burn, adjacent to the A1 Newcastle western bypass. Construction of the road began in 1986 and there were several consultation meetings with representatives of the Department of Transport, at which residents were given assurances about construction noise, access, obstructions, and so on. They were assured that all the problems would be kept to a minimum, as would traffic noise, fumes and vibration when the road was completed.
The usual horrendous disruption was experienced during the works—heavy plant and equipment being moved around in residential areas, blocked roads and walkways, mud, dirt, noise and the other general problems with which people have to deal when such work is in progress. One of my constituents sent me a list of the problems from which he and his family were suffering:

"1. Paths cracked and sinking due to vibration.
2. Cement dust in layers every day, worst whilst pumping mineshaft etc. full and constant vibration.
3. Cracks and settlement to east gable of house.
4. Cracks, settlement and pointing dropping out at back of house.
5. Plastic guttering ruined …
6. Extension cracks to brickwork and cement and ceiling cracking.
7. Lead flashing fell off chimney.
8. Bedroom ceilings cracked especially back bedroom.
9. Severe vibrations.
10. An actual piece fell off front door roof"—

Apparently, when my constituent told the constructors about the latter they thought it was a huge joke.
My constituent's letter goes on to explain about the interference with television reception, a rise in the incidence of burglary because of the rear access to properties, a rise in vandalism, and so on.
Furthermore, some of my constituents were obliged to allow access to their gardens so that the contractors could carry out works. Those, of course, were people whose properties were nearest the road line. They had to allow access to the utilities to lay pipes and duct work, and to other contractors to fill mine workings with concrete. During those activities fences were destroyed and shrubs and plants lost.
At that time my constituents were offered compensation for the disruption of between £1,200 and £1,700. Under the threat of compulsory purchase, they therefore allowed access and in 1987 they took the compensation. When the payment was accepted, the Department's officials assured four of the householders concerned that,

because of the design of the road through its concrete channels, they would not suffer from noise, fumes and dirt from the traffic that would eventually use the road.
That was not true. The noise and constant smell of petrol and diesel makes it impossible to spend a peaceful afternoon in the garden. But the householders could not possibly have known that when the agreement was signed. Naturally, but unfortunately, they accepted the experts' assurances about minimal noise and disruption.
The road was opened on 1 December 1990 by Her Majesty the Queen. Almost immediately, complaints came flooding in about the volume of traffic using the road, and the associated problems. I wrote to the then Minister about the problem, and on 15 February 1991 I received a reply in which he said, inter alia:
The noise levels and air quality … are in line with our predictions.
Nevertheless, compensation was paid to other residents who complained about disruption to their lives and devaluation of their property as a result of the traffic using the road. However, the residents who had received compensation of £1,200 to £1,700 for access were refused compensation for the problems caused by the traffic using the road.
So I wrote again to the Minister. On 7 April 1991 he replied:
owner/occupiers such as you mention insisted that the Department acquire title to the land required. They were paid compensation for the land taken and also for injurious affection as a result of their close proximity to the works. The compensation paid was agreed as the full and final settlement of all claims associated with the road scheme.
In other words, compensation received prior to the opening of the road debarred further claims for compensation, even though the original compensation was accepted by my constituents for disruption and access to their property.
My constituents are adamant that they did not insist, as the Minister stated in his letter, that the Department acquire title to the portions of land within their property boundaries. They did not receive any payment for land, because none was acquired. They received from the Department compulsory purchase orders. They were informed that if they refused entry to the land required, the orders would be activated. Therefore, they gave permission for access as they felt that they had little choice. None of their land was taken. They suffered great inconvenience. In some cases gardens were left in a disgusting state.
My constituents did not at any time ask for compensation. They were not aware that they were entitled to compensation. They were pleased when they were offered sums of between £1,200 and £1,700 for what they understood to be compensation for the inconvenience caused by the works. Whoever made the offer did not inform my constituents, until they had accepted the offer, that no further compensation claims would be considered.
As the Department of Transport must have been aware that large sums in compensation for property devaluation would be forthcoming—indeed, the Minister confirmed that the noise level was in line with their predictions—the offer to my constituents of sums of £1,200 to £1,700 was, they believe, tantamount to dishonesty. Therefore, they expect the Department to rectify the position.
My constituents ask how it can be possible for people who were not affected by the roadworks to receive at least 60 per cent. more than those whose property was occupied, when needed, by people connected with the works.
In trying to be co-operative, my constituents have suffered considerable loss at the hands of the Department of Transport, their own legal advisers, or perhaps both. It was not made clear to them that the sum that they received in compensation for disruption to their homes and gardens during construction would cancel any claim because of noise or traffic usage of the road which they could not have anticipated and which, according to the advice of Department officials, would be minimal.
In the latest letter in the long saga, the director of network management and construction at the Newcastle office of the Department told my constituent, Mr. Graham, of 46 Woodgrove:
the Department of Transport has no legal power to increase the compensation paid to you in 1987.
That misses the point. My constituents are not looking for an increase in their original compensation. They consider that to have been compensation for destruction of, and access to, property during the works. What they are now seeking is similar compensation, sometimes of about £6,000, to that received by other residents whose property was not invaded by workmen and whose lives were not disrupted to the same extent by the works.
Ministers seem to say that people are expected to take a gamble in such circumstances. If they accept compensation at an early stage for access and/or damage to property, they risk losing later when a new situation, which they could not have assessed in advance, arises. If they wait to see the eventual effects of the traffic using the road before they claim, they have no guarantee that the same level of compensation will apply.
Surely that cannot be a proper way to deal with such situations. Compensation should be assessed at or about the time when damage occurs, and ought not to preclude distinctly separate claims at a later date when there are new circumstances—in this case the traffic using the road.
I hope that the Minister will not trot out the old argument about rules and regulations. That will not do. There has been an injustice. That is clear to me, as it must be to others. There will be other road schemes; the Secretary of State for Transport announced several recently. On the south side of the Tyne, the same stretch of the A1 is the subject of statutory consultation. Concerned residents have been told not to worry. They have been assured that modern materials and landscaping will greatly reduce traffic nuisance. The same words were used in the public consultation over the Newcastle stretch of the road. If the public are to have confidence in the Department of Transport and in the assurances that they are given, they must receive treatment that goes to the letter of the rules and regulations, and that treatment must be fair and just. That is all that is being asked for in this instance.

The Minister for Roads and Traffic (Mr. Kenneth Carlisle): I thank the hon. Member for Tyne Bridge (Mr. Clelland) for raising an important

matter. I know that he has pursued it with great energy on behalf of his constituents, and I respect that. I know that his constituents will be grateful, too.
I welcome the presence of my hon. Friend the Member for Hexham (Mr. Atkinson), who also has an interest in the A1. He has championed the improvement of the A69 in his constituency.
The hon. Member for Tyne Bridge has argued his case with great force, and it might be helpful if I review the history of the road. The need for a western bypass of Newcastle was clearly acknowledged as far back as 1936, and the route has been protected since that time. However, it did not feature in development documents until 1945. Much new housing was built along the protected route from 1936 to the time when the building of the road reached fruition.
The Newcastle western bypass, which cost £88 million, was one of the most important schemes in the national road programme. On completion, it was to be designated as the A1 linking the trunk road north and south of Newcastle and Gateshead and connecting important radial routes from the west, such as the A69 and A696.
The scheme initially from Scotswood bridge to the A696 was added to the road programme in 1977. However, Tyne and Wear metropolitan county council considered that the bypass should extend further north to link with the Great North road at Wideopen, and both the county council and the Department of Transport carried out public consultation in 1978. In 1980, the then Secretary of State for Transport accepted the extension as forming the trunk road bypass. The preferred route was announced in 1981. An amendment to the southern extremity of the route was proposed in 1984 to allow for the construction of a new crossing of the Tyne. A public inquiry was held in November 1985, and the orders for the scheme were made in June 1986. The first contract for the main works started in June 1987.
The Department was aware of the problems that the building of parts of the route would entail from Scotswood road through to Kingston park but more particularly along the narrow corridor between Woodgrove and the A69 west road.
Unfortunately, some nuisance to local residents is unavoidable when work is being carried out on a scheme of this size, particularly in an urban area. The hon. Gentleman mentioned how the building of the road affected his constituency and the nuisance that the work caused. The Department did all that it could to minimise inconvenience and disruption. The measures taken to that end included the setting up of regular working groups meeting on a bi-monthly basis, on which members of Newcastle city council were represented to monitor and deal with problems as and when they arose. Close contact was also maintained with Gateshead. The Department issued a series of newsletters to keep residents and road users informed in advance of what was happening. Other measures before the start of works included the insulation against noise of dwellings that qualified under the Noise Insulation Regulations 1975. Extensive advance tree and shrub planting, provision of protective fencing and alternative access arrangements were also undertaken where necessary.
The detailed land requirements for the Newcastle western bypass were made public knowledge in the mid-1980's. Although the draft compulsory purchase orders showed land to be acquired from several


owner-occupied properties in the Southway and Woodgrove areas of south-west Denton, in fact the Department wished only to have essential licences over those areas of land. The licences were required to allow old worked coal seams to be grouted up. Owners of the properties affected had the right to serve blight notices on the Department, and several chose that particular option.
The district valuer, who, on behalf of the Department negotiates all land compensation matters for all road schemes, had to establish during his negotiations with the remaining property holders or their agents whether they were prepared to grant a licence for the grouting works to be carried out or whether owners insisted on title to the land being acquired. The district valuer made owners or their agents fully aware of the ramifications of both options, so they knew exactly what they would face with each option. The Department did not insist on acquiring title. In accordance with normal practice, the letter accompanying the notice to treat served on owners made it clear that the Department would prefer to acquire the lesser right, in this case a licence.
Those owners who were prepared to grant a licence were paid a licence fee for the duration of the work. That meant that compensation for any injurious affection on their property to which they might be entitled from the operation of the road would need to be the subject of a claim under part I of the Land Compensation Act 197:3. As the hon. Gentleman knows, however, such claims cannot be submitted until one year after the opening of the road —in this case December 1991.
Those owners who insisted on title to the land being acquired were paid compensation for the land taken and for injurious affection as a result of the close proximity to the works at the time of the acquisition in 1987. On completion of the acquisition, a legal transfer document was signed which included a clause accepting the compensation in full and final settlement of injurious affection and all other claims to which they were entitled.
Independent negotiations were conducted between the district valuer and solicitors and/or agents representing the residents.
The affected residents of Woodgrove decided, on the basis of independent professional advice that they received, to require the Department to acquire title to the land involved. The advisers will no doubt have considered the advantages and disadvantages to their clients of the options available. They decided to proceed on the basis of immediate compensation and signed agreements in full and final settlement of all claims associated with the road scheme. No pressure was put on the residents by the Department as to the course of action that they should taken in this matter. Therefore, the Department has a different interpretation of the extent of knowledge of both the agents and the residents about what they were doing. We believed that they had full advice and knowledge of what was implied by their specific choice to sell at that time.
It is important to recognise that in 1987 neither the professional advisers representing the residents nor the district valuer could have been certain what, if any, compensation might result from a later assessment.
It is also important to recognize—this is central to the case—the Department has no legal power to increase the compensation paid to owners in 1987. There is no provision in legislation to allow us to do that.
As I mentioned previously, the route is close to residential properties which have been built since the bypass was first suggested. The protection of the route meant that relatively few houses had to be demolished, some 66 in total, but the narrowness of the corridor necessitated extensive measures to reduce the environmental impact of the road, especially noise effects on the residents. The road was therefore designed so that physical barriers exist between the traffic and the houses, either by constructing the road in cutting, the use of earth mounds or solid parapet walls. Noise insulation under the Noise Insulation Regulations was provided to 1,052 properties prior to the start of works. Subsequently, insulation has been offered to owners of a further 63 properties following completion of the bypass and the consideration of their appeals against non-provision which are permitted by the regulations.
Other problems were connected with the building of this road, as can be expected in a scheme of this size where there were many matters to resolve. A 1 km length of the bypass at the southern end, adjacent to the Shibdon pond nature reserve, is on a 9 m high embankment over alluvial deposits such as soft peaty clay. That posed problems of not only stability but ensuring that the works did not endanger the wetland areas of the reserve by changing the level or acidity of the water.
To overcome those problems, an advance works contract was let at a tender price of almost £2 million to instal vertical band drains at 1·4 m centres to speed up consolidation of the clay layer and to place a 2 m thick blanket of stone over the entire area. Carboniferous limestone was chosen for the blanket because of its inert chemical properties and it acts both as a drainage layer and as a working platform for the embankment construction. The contract included an extensive array of geotechnical instruments with automatic logging equipment to enable embankment stability to be monitored during the subsequent main filling operations.
A 4 km length of the route, from the River Tyne northwards, contained old coal mine workings at shallow depths and in some locations several seams had been worked. These workings took the form of parallel galleries with intermediate pillars left in for roof support. Most had collapsed to some extent but the remaining voids could have affected the stability of the overlying ground on which the new highway and structures were to be founded. To prevent damage to the road by future settlement, the workings were either removed when they were very close to the new road level or, if deeper, drilled and grouted with cement or pulverised fuel ash.
During the process, about 14,000 tonnes of coal were recovered and more than 60,000 tonnes of grout were injected into the ground. That was a big operation.
There are eight subways on the bypass at two grade separated interchanges and consideration was given to the best treatment for their internal faces. It was decided to use some pictorial glazed tile finishes which made them attractive to pedestrians and deterred graffiti. The subways are also wider than normal at 5 m. A design competition from two colleges of art was staged with a cash prize for the best three designs to be used in the subways.
As the route lies within an urban area, it was also considered necessary to introduce a high standard of landscape works so that the bypass would be attractive to motorists and residents. Extensive shrub and tree planting was introduced, with earth mounding to the sides of the


bypass. Low maintenance grass seed was used. The aim was to introduce wild flowers which was a novel feature then and to give an interesting and changing pattern of vegetation throughout the year.
The 11 km long bypass was divided into five contracts to separate work requiring special expertise and keep the size of individual contracts to reasonable proportions. The works were inaugurated by the then Secretary of State for Transport, John Moore, in April 1987. Of particular note is that about £700,000 was spent on horticultural and landscape works and £12 million was expended on statutory undertakers' diversions. There are 59 structures and seven grade separated interchanges on the bypass.
I go into those details to show that it was a complicated road. We took huge trouble to make the road sympathetic and meet the demanding nature of the landscape and the urban area through which it passed. As I said previously,

we consulted carefully with local people as we built it, so great care was taken in the building and design. It is a road of which in general we can be proud.
I fully recognise that the hon. Member for Tyne Bridge is not happy with the compensation arrangements but I believe that all those people who could claim compensation, or with whom we dealt, had full advice and clear knowledge of the true choice before them. They had a clear choice and their advisers were made fully aware of what was behind each option. They knew full well that if they accepted compensation in 1987, by law we would have no power to reopen those compensation claims.
I am sorry that in the end people were disappointed. No one was to know then. They made their choice and by law I have no power to open the case again. However, I fully respect the hon. Gentleman for fighting for what he believes are the rights of his constituents. I am sorry that in my reply I have had to disappoint him. I hope that I have helped to explain the position as clearly as possible.
Question put and agreed to.
Adjourned accordingly at thirteen minutes to One o'clock.